IIMA/CIIE0012

Ryan’s Dilemma
It was not the oppressive heat of the summer afternoon in May 2016 that weighed Ryan Bansal
down as he sat in his father’s plush, air-conditioned office in Chennai, Tamil Nadu. The cause of
his discomfort was something entirely different. After having earned a postgraduate degree in
management from the top-ranked Indian Institute of Management, Ahmedabad (IIMA)1 a year
earlier, Ryan had joined his father’s flour processing business in Chennai. However, things had
not worked out as well as he had hoped in the 12 months that he had spent there. Ryan had joined
with plans to transform his father’s traditional food manufacturing business, but none of his ideas
had materialised as he had envisioned. Now, the options before him were to either continue in
the family business and persist with his plans, however difficult, or quit and take up a job offer
he had received in Bangalore. He was torn. Quitting would mean accepting defeat after putting
in an entire year of effort.

Career Decisions

Ryan had been a very bright student from his early childhood days. With the encouragement of
his parents and teachers, Ryan performed exceptionally well in school and went on to prepare
and qualify for a seat at the prestigious Indian Institute of Technology (IIT), Delhi2 where he
studied electrical engineering.

Not unlike many of his peers, Ryan, though endowed with academic ability, lacked clarity about
his life and career goals. Unsure whether to work or study further after completing his four-year
degree in engineering, he appeared for job interviews and wrote the IIM MBA entrance exam. As
luck would have it, Ryan not only landed a highly coveted job at one of India’s top fast moving
consumer goods (FMCG) firms, but also aced the MBA entrance exam and was offered a seat at
IIMA. He was uncertain about which way to go. He leaned towards the idea of working for a few
years, then studying for an MBA at a top college in the US and eventually joining his father’s
business or starting something of his own. However, sensing Ryan’s uncertainty and swayed by
IIMA’s reputation in India, his parents urged him to pursue an MBA. Hoping that the programme
would help him clarify his goals and open new doors for him, Ryan rejected the job offer and
joined IIMA.

By the time he graduated from IIMA, Ryan was equipped with the concepts of business, but he
remained undecided about his next steps. Joining the family business seemed more attractive to
him than taking up a regular corporate job, which was what most of his classmates were doing.

1
Indian Institutes of Management (IIMs) are the top-ranked management education institutions in India.
2
Indian Institutes of Technology (IIT) are the top-ranked schools for engineering education in India.

Prepared by Professor Neharika Vohra, Smriti Agarwalla, FPM and Snehil Basoya, Research Associate,
CIIE, Indian Institute of Management, Ahmedabad.
Cases of the Indian Institute of Management, Ahmedabad are prepared as a basis for classroom
discussion. They are not designed to present illustrations of either correct or incorrect handling of
administrative problems.
© 2018 by the Indian Institute of Management, Ahmedabad
2 of 11 IIMA/CIIE0012

Ryan’s family ran a traditional flour (atta)3 mill with employees and machinery that were both
decades old. It did not have a corporate “feel” to it and did not employ any of the innovative
concepts that Ryan had studied in the finance, marketing and operations courses of his MBA
programme. The idea of transforming the family business and taking it to new heights was
alluring to him. During case discussions of organisations in his MBA classes, he had often
compared them with his family business and thought, “I wish this happened in our business.”

Ryan had always turned to his parents for guidance on career matters. This time, however, when
he asked his father for advice, his father said he wanted Ryan to take his own decision. Unable to
decide whether to take the campus placement route or venture out on his own, Ryan successfully
applied for the Mavericks scholarship at IIMA’s Centre for Innovation, Incubation &
Entrepreneurship (CIIE),4 which provided students with a two-year window to pursue
entrepreneurial ventures or unconventional career choices. The scholarship also gave awardees
the option to apply for regular jobs through the institute’s placement system during the two-year
period. Ryan decided to avail of the scholarship to launch an offshoot of the family business. He
knew that he would be supported by the existing infrastructure of the business, and in return, he
would improve the family business. In the end, it would be a win-win situation even if he decided
to leave after two years and explore other options.

The Idea

Ryan had grown up seeing wheat all around him, so this was the first thing that came to his mind
when he brainstormed ideas for a new business with the resources and infrastructure that his
father already had. A professor at IIMA, renowned for his experience in the entrepreneurship
space, suggested that Ryan look into the fortification of atta as a possible business idea. Ryan
found that there were indeed several organisations that had made fortification of atta a significant
part of their research agenda. He set up meetings with consultants at various organisations such
as the Food Fortification Initiative and the World Health Organisation, India, seeking the best
approaches to fortification and gaining insights on providing different kinds of atta for different
purposes. He floated a survey among his network to see if there was interest in fortified atta and
he got a positive response. At the end of his exploration, he concluded that producing fortified
atta could be a potential business and was worth trying out. Ryan also decided to spend a month
in his father’s unit to get an overview of the atta manufacturing process. He believed this would
help him understand not only the product and raw material market but also the overall food
manufacturing industry.

The Family Business

Ryan’s grandfather had four brothers. Three of the brothers and their families lived together in a
joint family structure and ran a federation of businesses. Ryan’s grandfather and his brothers led
the business, which had four verticals, namely, apparel, food and flour mills, education, and

3
Atta is the Hindi language word for wheat flour.
4
The Centre for Innovation, Incubation & Entrepreneurship (CIIE) at IIMA was established to help disruptive
innovations and aspiring entrepreneurs succeed commercially. Comprising of faculty, alumni, mentors and experts
from the industry, CIIE supported entrepreneurs through seed-funding, incubation, mentoring, training, knowledge
dissemination and research.
3 of 11 IIMA/CIIE0012

automobiles. The flour mill business had eight flour mills, five of which were managed by Ryan’s
granduncles — three in Orissa and two in the National Capital Region (NCR).5

Raman Bansal, Ryan’s father, was the eldest of three siblings. Ryan’s father ran one mill in
Chennai called Ravi Flour Mills. Many of the 40 members of the three generations (Ryan’s
grandfather and his brothers, their sons and their families) lived in the same house, and each sub-
unit of the family had a separate kitchen and sleeping quarters in the house. A younger brother
and sister and his parents completed Ryan’s immediate family. It was customary for the young
boys in the family, on reaching the age of 17 or 18, to join the elder male members of the family
in running the business.

Ravi Flour Mills

Ravi Flour Mills had a total production capacity of 4,800 tonnes, with 3,600 tonnes processed
using roller milling6 and 1,200 tonnes using chakki, a traditional method.7 The unit produced two
types of atta: tandoori atta8 and chakki atta. Tandoori atta was produced using rolling and a
separation process in which maida (refined flour), suji (semolina), husk, and bran were the by-
products. Chakki atta was manufactured by grinding whole wheat through large rotating stones
into flour, with bran as the only by-product. There was a greater demand for tandoori atta than
chakki atta in South India. (Exhibit 1 provides details on production costs and average prices of
the products). The average monthly production of Ravi Flour Mills was between 1,800-2,000
tonnes, just about the volume it was able to sell in Chennai and its outskirts. It had a turnover in
the range of INR 520-560 million for four years from 2012 to 2016, and had made at least 30% of
the turnover as profit after tax.

Sales

Ryan’s father’s focus had always been on institutional sales. Ravi Mills supplied tandoori atta and
maida to reputed brands such as ITC, Britannia and Parle for biscuit manufacturing, semolina in
bulk to distributors and retailers, and husk and bran to manufacturers of cattle feed. Marketing
costs were negligible for institutional sales. The mill spent about INR 10,000 per quarter on
participating in events and exhibitions. It also manufactured a small quantity of chakki atta for the
retail market under the brand name “Ratan”. For this, it procured good quality sharbati9 wheat
from Madhya Pradesh at a cost of INR 19-20 per kg, slightly higher than the cost of regular wheat
at INR 18-19 per kg (see Exhibit 1). It sold its branded atta through three organised retail stores in
Chennai. The average monthly sales though this channel was less than 5% of total sales. The
processing costs for retail production and institutional production were the same. However, it

5
The National Capital Region(NCR) is a conglomerate of cities centred around the national capital territory of Delhi
in India.
6
Roller milling is a type of milling process that uses cylindrical rollers to separate different components of wheat
grain.
7
Chakki processing grinds the wheat grain into wholemeal wheat flour.
8
A special kind of flour with high gluten content used for making special Indian breads like naan and rumali rotis
9
Sharbati is a variety of wheat produced mainly in the central Indian state of Madhya Pradesh. It is sweeter than
normal wheat, which gives it its name sharbati, meaning “sweet” in Hindi.
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was possible to obtain a slightly higher margin of INR 2.5-3 per kg on retail sales compared to
institutional sales.

Employee Information

Ravi Mills employed 12 permanent staff and 30-40 contract labourers. Its permanent employees
included four managers, four employees on the manufacturing team, one office assistant, one
cook and two laboratory technicians. Of the four managers, the finance manager, the logistics and
procurement manager, and the manufacturing manager were responsible for their particular
domains, while the general manager was responsible for overall plant coordination, warehouse
supervision, storage and maintaining quality standards (see Exhibit 2 for the managers’
educational backgrounds and tenures at the mill). The duties of the two lab technicians included
testing products for impurities, colour and other characteristics, benchmarking against
competitors, and maintaining standards. The laboratory was housed in an 8-by-4-foot room and
resembled a typical chemistry lab in a school or college.

Ryan’s Early Days at Ravi Mills

Ryan’s primary business plan was to manufacture and sell fortified atta. However, he quickly
realised that the company’s existing infrastructure and distribution network would not support
his plan. The manufacturing unit was not equipped to handle the changes required to produce
fortified atta. He also was surprised that their brand Ratan was sold in only three stores in the
outskirts of Chennai. Brand recognition for Ratan was virtually non-existent. Thus, he felt that it
was important to build brand awareness first and set up a stronger distribution network before
launching new products such as fortified atta.

Though Ryan had realised that his family business was not like the organisations he had studied
in his MBA programme, he was totally unprepared for the vast contrast between his experience
in the classroom and the organisational reality of the family business. He said,

At Ravi Flour Mills, key business and operational decisions were based on
experience and tradition rather than set procedures. No formalised human
resource processes existed for managing staff and workers. Roles and
responsibilities of employees were not defined, and there were no formal
reporting mechanisms or periodic updates about weekly operations.

Ryan learned that Parle, a big and important client, had stopped doing business with Ravi Mills
because the mill did not have auditable reporting documents or structures. Basic protocols that
were taken for granted in professional organisations were also missing; for instance, there were
no records of the amount of raw material fed into the mill, the output that was delivered and
differences in weights due to moisture. Ryan felt that the work environment in the manufacturing
unit was very laid back and that even supervisors lacked dedication and focus. It was not
uncommon to find supervisors missing for two hours a day or for the men working on the
grinding machine to spend 45 minutes hunched over their tea and mobile phones.
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Ryan’s Actions in the Ensuing 12 Months

As a first step, Ryan set out to outline the roles and responsibilities of managers and workers to
minimise role ambiguity and role conflict in the organisation. He noticed that although
permanent employees had been with the organisation for several years and knew their work well,
they had no defined roles and responsibilities and stepped into each other’s roles as and when
necessary. There were occasional conflicts between them, which sometimes trickled down to the
contract workers. In such situations, Ryan’s father dealt with the conflict as he thought expedient.
While there was nothing in these situations that could not be handled, they resulted in loss of
time. To avoid a repeat of the Parle debacle, Ryan took the lead in setting up proper
documentation and reporting processes. As a start, he asked the managers to record, in bullet
points, all the activities that they performed or knew that others performed at the mill and share
these with him or his father. Since many of the managers were more comfortable communicating
in their mother tongues, he encouraged them to write their reports in their language of choice.

Bringing changes in employee functioning turned out to be more difficult than Ryan had
anticipated. He faced resistance from the permanent employees, particularly those who had been
with the organisation a long time. Within three months of Ryan’s arrival, the manufacturing
manager quit, followed by the laboratory head who was a relative of the manufacturing manager.
The buzz on the organisation grapevine was that they were unhappy to have an “inexperienced
babu” (meaning boss) prying into their work. However, these resignations did not create
significant problems for the unit. Anticipating possible resistance and attrition, Ryan’s father had
already appointed two lab technicians who took charge when the laboratory head left. Ryan was
surprised by his father’s foresight. His father, enthused by Ryan’s initiatives, supported him, and
though he did not proactively help his son, he was always available to discuss his ideas with him.
Ryan did not reach out to his uncles or discuss his plans with them, and his father also did not
share much about what Ryan was doing with other family members.

Ryan also worked on creating a website for the mill and an email account for every manager. He
hoped that this would encourage professionalism in communications with customers, suppliers
and other government and private institutions.

Ryan’s next order of business was to institute systems and processes in the organisation to achieve
growth. He hired two interns from a local engineering college and began working with them on
several projects simultaneously. The first project focused on audit and quality management and
on evaluating the option of palletisation in the storage warehouse. He had identified this as an
area of concern from the feedback given by Parle and Britannia during their audits of the factory.
The second project was to have consumer households blind test product packs. The test was
conducted to obtain information on how consumers perceived different atta products in the
market: Were there differences in quality among the products or was it marketing that pushed
them to favour a particular brand over the other? The team gave Ratan atta to seven families in
unmarked packets. These families were chosen because they said they used branded atta. Some
days later, when asked which brand they thought they had used, five out of the seven families
responded that it was Pillsbury.10 The third project was concerned with setting up a distribution
network, and this was the project in which Ryan himself was most extensively involved.

10
One of the leading atta brands in India.
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Setting up the Distribution Network

Ryan had identified the lack of an adequate distribution network and reach of the product to end
customers as one of the major bottlenecks in achieving growth. He wanted to sell atta in hospitals,
restaurants and grocery stores with an initial target of 20 hotels and hospitals and 50-70 retail
stores in and around the neighbourhood of Ramapuram in Chennai. He viewed hospitals as an
attractive segment because he believed that having them as clients would help him make credible
claims of superior product quality to other prospective customers. With the help of his interns,
he was able to bring on board Mahalaxmi Hospitals, a well-known hospital in Chennai, with a
monthly volume of 1.3 to 1.8 tonnes at an average sale price of INR 23 per kg. However, this initial
accomplishment appeared to be a flash in the pan, and Ryan was unsuccessful in acquiring any
other hospital as a client. In spite of providing the requisite samples and certification and
promising superior product quality and service levels, he was unable to convince any other
hospital to switch over from its existing vendor. After a few months of continuous follow-ups,
Ryan and his interns gave up and settled with just one hospital in their portfolio.

The next target customer segment that Ryan focused on was city restaurants. However, after
meeting with a few of them, he realised that fine dining restaurants had a low requirement for
atta and that he would not be able to significantly increase his turnover by selling to them. Smaller
local restaurants and roadside dhabas,11 on the other hand, made large quantities of rotis12 and
other breads for both dine-in and catering orders. These local eateries, with their potential for
bulk atta orders, appeared to be an attractive segment. However, Ryan was not able to
aggressively pursue this customer segment because his hands were already too full and he did
not think it wise to incur additional costs by hiring more salespeople.

Obtaining limited success in the first two consumer segments, Ryan turned his attention to retail
sales. With marginal increases in the sales team, he was able to extend his reach to 600 retail stores
in Chennai, including big names such as Bombay General Stores, Santhosh and Murugan. Most
of the stores were big buyers and he was able to obtain a stable monthly sale of 75 tonnes. Ryan
also enhanced the product portfolio to include items such as refined flour, semolina, gram flour
(besan), broken wheat (dalia)13 and sharbati atta. The plant did not manufacture gram flour or
broken wheat. They were procured and packaged for the retail market. Ryan chose to add gram
flour to the portfolio because it was a fast moving item with high margins and wheat dalia because
it had been part of their product portfolio several years earlier and Ryan wanted to reintroduce
it. His efforts to expand the retail footprint of the business had taught him that competitive pricing
and prompt service were the keys to wooing retail buyers. Therefore, he introduced lower prices

11
Dhaba is a common term for a roadside restaurant in India. They are typically situated along highways and cater
primarily to truck drivers and people travelling by road or public transport. Dhabas serve affordable, local/
homestyle cuisine.
12
Also known as chapati, roti is a flatbread made of atta and consumed across the Indian subcontinent as an integral
part of a meal.
13
Dalia is an Indian dish made from broken wheat. In this context, it refers to packaged broken wheat that can be
used to prepare dalia at home.
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and schemes such as “10+1” and “30+4”.14 He also guaranteed two-day doorstep delivery and
cash discounts to the large stores for upfront cash payments.

Handling the Sales Team

The main challenges for Ryan in setting up the distribution network were customer acquisition
and managing the new sales team that he had hired. Since he was new to this domain, he enlisted
the help of his uncle, Hari Bansal, whose mill had been involved in direct distribution in
Bhubaneswar, a city in the state of Orissa, for the last 10 years. Ryan brought his uncle’s food and
marketing consultant Rahul Das on board for a couple of months to help him understand
recruitment, marketing and distribution models. Ryan obtained profiles of potential candidates
through recruitment agencies, and with the help of Das, he hired five sales representatives, a sales
coordinator, a sales manager and a distribution salesperson. The average monthly salary of a sales
representative was INR 13,500 per month and managerial-level sales personnel were paid
approximately INR 17,500 per month.

Ryan organised an induction and training programme for the sales representatives. The
manufacturing manager and lab manager conducted a few sessions on mill processes and
production matters. Sales managers received on-the-job training by accompanying the general
manager or Ryan on visits to existing clients over two or three days to learn how to negotiate and
close deals. The newly hired sales managers were also sent to his uncle’s unit in Bhubaneswar for
formal training for a week or so. To give his new team a fresh start and prevent them from being
influenced by existing employees and their set ways, Ryan moved to a new office with his sales
team.

Managing the sales team proved to be far more difficult than Ryan had expected. He had set
benchmarks for his new team similar to those of his peers who worked in the sales and marketing
departments of multinational corporations (MNCs) and he expected his team to be equally
capable and committed. He soon realised that he had erred in overlooking the fact that he was
comparing his team to people who had been educated in premier institutions and were being
paid far more than what he was paying his employees. Moreover, the MNCs he aspired to match
had processes that had been established and honed over decades, whereas he was trying to set
up everything from scratch. In short, Ryan realised that the ability of his salespeople did not
match his expectations and that he would have to spoon-feed them at every stage. His sales
coordinator was comparatively better qualified but lacked ground-level experience because of
which he was unable to adequately handle his roles and responsibilities. Within three months of
forming his team, Ryan was thoroughly frustrated by the amount of effort he had put into training
his sales personnel and the meagre results he had obtained in return (see Exhibit 3 for a timeline
of Ryan’s activities over the year).

Another experience that shook Ryan and his confidence was an act of fraud committed by one of
the sales representatives, Rao, whom he had hired in July. Ryan had formed a positive impression
of Rao in his initial interactions with him. In November, Ryan noticed that one particular outlet
had accrued a payment receivable outstanding of INR 500,000 over two months. In February, Rao
did not turn up at the office for a week and was unreachable. Ryan, urged by his marketing

14
The 10+1 and 30+4 schemes offered 1 kg and 4 kgs of atta free on purchases of 10 kgs and 30 kgs of atta,
respectively.
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manager to investigate, went to the outlet only to find that Rao had been making fraudulent
reports and had walked away with the money he had collected from the outlet. All attempts to
trace Rao were unsuccessful. Ryan was utterly disappointed with himself and could not believe
that he had been fooled so easily. Ryan’s father tried to calm him down, explaining that such
mistakes were common in the initial days of leading a sales team, but to no avail. Ryan was stung
by the thought that despite his advanced education and enviable resume, he had been outsmarted
by someone who had not even finished high school. After the incident, he began to question
whether he was at all prepared to deal with real world problems like this one. Ryan wondered
whether he needed more on-the-ground experience before he was fit for the leadership role he
was in.

Challenges of a Family Business

While Ryan was still coming to terms with the operational challenges of the changes he had
initiated in the organisation, he was also facing the challenge of working in a traditional family
business where relatives often asked him pointed questions or laughed at his expense. During
informal discussions at family meetings, his uncles and cousins would enquire about the business
and what he was doing. Advice, though uninvited, was freely given. For example, after his
debacle in sales, the elders in the family felt that it was best to keep marketing expenses low rather
than raising them and burning a big hole in the pocket. Running newspaper and television
advertisements required more funds than a traditional family business like his had ever spent.
All the family members invariably said “no” whenever Ryan suggested spending more on
advertising. He was forced to improvise and manage with limited spends on advertising.

A more significant problem was the interpersonal dynamics of a large family with members of
different age groups. Ryan found himself at odds with older family members where strategic
decisions were concerned and he realised that he could not simply counter their arguments with
logic. Direct negative criticism from the elders made Ryan resentful, as did the constant
unfavourable comparisons to his uncles and cousins, who, though of a similar age, had far more
experience in the business. In Ryan’s mind, every failure of his was magnified while the failures
of others were brushed off lightly. Moreover, after having lived independently for many years,
he found it difficult to adjust to life at home and felt that his independence was being
unintentionally curtailed. His own mental comparisons with his classmates and friends from IIT
and IIM, who were travelling by air for work and doing interesting things while he was running
from pillar to post in the bylanes of Chennai trying to acquire clients, did not help matters.

What Next?

As his first year in the business drew to a close, Ryan found himself feeling more and more
dissatisfied. He sensed that he would not be able to grow or do well at Ravi Mills. Though he had
worked on several ideas, none of them had shown satisfactory results. The reasons for this,
according to Ryan, ranged from an unfavourable environment at the mill to his own lack of
preparation to undertake the journey. Educated at two of the best institutions in the country,
Ryan had expected to do wonders — solve big problems and introduce new systems with
considerable ease, and yet, at the end of the year, all he had was a pile of failures. With each
passing day, Ryan became more frustrated, his self-doubt grew and he felt less worthy of running
a business. Unable to reconcile himself to the failure of his plans, Ryan repeatedly asked himself
how on earth it could have happened. Were the situations themselves particularly difficult or was
9 of 11 IIMA/CIIE0012

it his lack of competence? Did his failure have something to do with the fact that he came from
prestigious institutions? He wondered whether he would have responded differently in many
situations if he had been an average student from an average college.

By March 2016, Ryan was in a deep fix and no longer sure what he should do. He was not sure if
the fortified atta business could ever become a reality in the current set up. He had a number of
options before him. One, he could quit the family business completely and join a multinational e-
commerce logistics firm in Bangalore that had recently made him an offer. Two, he could join the
firm in Bangalore and continue to be partially involved in the family business. He already had a
sales team in place. With the help of a sales manager to supervise the day-to-day activities, he
could continue to oversee the retail sales division he had created. And three, he could refuse the
job offer and continue in the family business full time. If he chose this option, he would need to
do some serious introspection, reflect on what had gone wrong, and chart out a clear path for
himself in the context of his family business.
10 of 11 IIMA/CIIE0012

Exhibit 1

Production costs

The cost economics of atta production for institutional sales are shown in Table 1. Even though the minimum
support price of wheat as per the government regulations was INR 17.5 per kg (at the time of writing the
case), the mill procured wheat from brokers in Madhya Pradesh at INR 18-19 per kg.

Table 1: Cost Economics of Prices of Chakki Atta

Factor Cost (per kg) (in INR)

Procured wheat 18-19

Manufacturing 1.5

Electricity 0.5-0.7

Packaging 0.7-1

Others 0.5

Margin 1.5-2

Final price 23-24.5

The proportion of by-products in the manufacturing of tandoori atta and their average prices were as
follows:

Component Percentage Price (in INR)

Maida (refined four) 50 24

Suji (semolina) 15 27.5

Tandoori Atta (flour) 15 23.5

Bran 20 17.5

Source: Company records.

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Exhibit 2
Tenure and Education Qualifications of Managers

Manager Tenure Educational Qualification

Finance Manager 15 years High school
General Manager 8 years Bachelor’s degree
Logistics and Procurement Manager 15 years High school
Manufacturing Manager 2 years Diploma in flour milling from local institute
Source: Company records.

Exhibit 3
Timeline of Ryan’s Activities

Timeline Activities
(2017)

April-June - Understanding mill, finance and supply chain processes

- Defining employee roles, establishing reporting mechanisms and handling
resistance to organisational change

July-Sept - Hiring a sales team to revamp distribution and sales

- Advertising products through shopkeepers
- Exploring new potential institutional customers

Oct-Dec - Expanding the retail distribution network

- Shifting focus from institutional customer acquisition to retail sales
- Building and managing the sales and distribution team

Jan-March - Grappling with the challenges of working in a family business

- Deciding whether to leave the business and take a corporate job

Source: Created by the authors.