The golden rules of doubles

The story of IndiGo soaring to great heights as a first-generation business set up by two individuals with diverse backgrounds has been amazing. The game the duo played with Rahul Bhatia as the captain and Rakesh Gangwal in a supportive role all these years has given the company a 50 per cent market share of the Indian aviation sector. IndiGo hit an air pocket when Gangwal raised multiple governance issues. While the operations are intact, thanks to high level of professionalisation, the current imbroglio could lead to a larger crisis that could (and should) have been avoided with some strategic thinking on managing a doubles game.

Basic rules of playing with a partner successfully: Playing a doubles game successfully is difficult. Players need to complement each other on competence and capabilities; they have to not only bring value to the table as subject champions but also have a compassionate mind to support each other. The partners must be able to read each other’s minds clearly and empathise. Mutual trust is fundamental to achieving the same and making the doubles team a winner always. 

Any doubles game that is played on a long-term basis is under the influence of both internal and external forces. The players and their priorities undergo changes, often without them realising they have, even as the external environment changes rapidly. That is when the game becomes tricky. While the players are busy with the game and their own other priorities in life, the tarmac itself may change when the environment drives the business into unanticipated success and glory. The scenario may go out of strategic control before the captain realises what is happening. Once trust is lost between the partners, the fall is fast. This is what happened in Indigo.

Where did the Indigo founders go wrong?

The Bhatia-Gangwal shareholders' agreement provided for the board constitution and its composition, giving Bhatia the lead role in operations. The fundamental assumption in that was the partners would consciously identify and address all possible concerns that have not been articulated. This includes implications for the company’s strategic response to emerging growth opportunities with the market suddenly opening up and the existing players losing competitiveness. The IndiGo founders do not seem to have had identical views on a number of areas covering how, when and where of a new growth strategy. They also do not seem to have thought through a resolution route to addressing such unanticipated situations. While growth is fine, how much one wants to grow and how fast are equally important, raising questions about a number of questions about strategy implementation and resources building.

The challenge seems to have been compounded when the personal priorities of the two individuals concerned also underwent changes. One of the points of governance concern raised by Gangwal is about related party transactions and conflict of interest of Bhatia whose family has a significant presence in the hospitality sector. When they started the journey in 2004, such a scenario did not exist. While it is not explicitly reported, there is every possibility of one partner feeling left out of a lot of discussions covering the grey area where strategy and operations overlap. This normally happens when the dominant player gains greater confidence and starts asserting himself while the other player does not object initially or clearly!

Tricks to avoid grounding a flight: Doubles players (teams too) must recognise that the destiny of their creation/product depends on two pillars and any of their actions, including inadvertent and involuntary, may lead to the collapse of the empire that took several years and huge effort and sacrifice to create. They have both moral and economic responsibilities to preserve their creation. They need to constantly revisit the background to their coming together to play, changes in their own priorities, aspirations and capabilities and what they want to make the oragnisation to be in an environment that is undergoing changes rapidly. Regular and structured formal reviews must accompany informal heart to heart dialogues for long-term togetherness. 

The author is professor and executive director, Thomas Schmidheiny Centre for Family Enterprise at the ISB