Focus on Leadership: A commitment to her values has proven fruitful for Rika Shah - Mar 2018
Interview by Kemp Harr
Rika Shah started MS International, originally a stone import and distri-bution business, in the basement of her Fort Wayne, Indiana home in 1975. At the time, Shah-a math teacher who had immigrated to the U.S. with her husband only a handful of years before-was pregnant and seeking a means through which to generate income while also caring for her young family. But Shah also had a drive to build something-a business that would make a difference by staying true to the values she held dear.
Started on a shoestring and without external funding, MSI grew steadily under the leadership of Rika and her husband, Manu. In 1981, the company secured a contract to supply the black granite for the Vietnam Veterans Memorial in Washington D.C. and the couple invested their entire savings into the project. Today, their sons, Rajesh and Rupesh, are co-presidents of the company, which surpassed $1 billion in sales last year.
Q: Five years after coming to this country from India, you started an importing business that in 2017 surpassed $1 billion in sales. Where did the vision for MSI come from?
A: To be honest, when I started the business, there were no grand ambitions of becoming the company we are today. I was just trying to keep busy, as I always had an entrepreneurial zeal, but motherhood was also very important to me. In the early ’70s in the Midwest, where I lived, there were not a lot of opportunities for women-and especially immigrant women. Times have changed significantly, and I’m proud of all the opportunities that are now available to women.
Prior to and after starting MSI, I was a math teacher, and there are many aspects of teaching that can be applied to entrepreneurship. Two of the most important are patience and long-term thinking. In addition, it seems successful teachers as well as successful businesses do not view relationships solely as teacher/student or vendor/customer but rather think of them as partnerships, wherein both sides can learn from each other. My math background is also of help; we try to keep our finances at MSI very conservative. In the early days, supported by my teaching salary, we didn’t have a lot of cash, so we were very systematic on how we used it within the business. That same thought process still exists today.
Q: In those early days, how did you balance your duties as the mother of a young family with the demands of a startup company?
A: Being a mother is a very tough job and so is starting a new venture. One good thing was that we were in no hurry to expand the business. We had no external debt or equity, so we had no external pressures to expand and scale quickly. Prioritization-a lesson that continues to be a part of every strategic meeting at MSI-was key, and we only took on what we believed we could handle and that which would produce success.
Each night, we would put the kids to bed and then start working on MSI. As we were collaborating closely with companies in India at the time, the situation worked out beautifully: nighttime in the States was daytime in India, so we received responses faster than anyone else.
Q: Your husband, Manu, studied mechanical engineering but later decided to join you at MSI. How have you applied his engineering background to the business?
A: In order to come to America, my husband had to take on debt from family members and local well-wishers. Due to this, his goal was to get into the work force as soon as possible and pay back the debt. Mechanical engineering was one of the faster degrees available, and he worked extremely hard to finish his master’s degree in one year. His mechanical engineering degree has been very valuable to MSI over the years. It forced a disciplined way of thinking about all strategic initiatives. For every large undertaking MSI engages in, there is a full blueprint and strategic plan constructed. We highly test all aspects of the plan, just as you would in engineering before releasing a new truck feature.
My husband also has an entrepreneurial zeal and, ultimately, wanted us to use our hard work and knowledge to take disciplined risks so that we could meet many of our personal goals. These goals included producing as many jobs worldwide as possible. Our belief is that jobs will solve most of society’s problems. Coming from India, we could see firsthand how a thriving middle class could solve many of society’s struggles.
Q: It’s no secret that you attribute much of your success to the priority you put on family. Tell me about that.
A: Family is extremely important. Manu and I noticed early on that many of the successful people we knew were surrounded by a strong family structure. Family strength is one of the reasons I believe MSI has been successful.
Q: Are you concerned that many professionals in society today are moving away from this foundation?
A: In today’s world, there are many pressures put on professionals. It is almost required for families to have two wage-earners. That said, at MSI we continue to spend a lot of time deciding who should join our team. If they don’t share our value system, we will not hire them, regardless of how much experience or knowledge they have. Our culture is too important to us, and we would never sacrifice our foundation for short-term economics.
Q: So what traits are you looking for in a potential employee?
A: We take the hiring decision very seriously at MSI. We have a detailed interview process. First and foremost, we are looking for teammates who are adaptable. The business world is changing quickly, so specific experience and knowledge that is valuable today may not be as pertinent tomorrow. In addition, having a team approach and a long-term view is important. Our whole company works as a team, and there are no individual awards or credits given. Finally, we have been in business for 43 years and believe we are just getting started, so our team must have a long-term view.
Q: Do you feel the U.S. is as nurturing to immigrants today as it was in the mid ’70s?
A: The United States is a great country. My husband and I came here with nothing except an education and a drive. This country enabled us to raise two children while also working to build a business that we believe is making a difference. This could not have happened in our home country or in many other countries in the world. Today there are some political ups and downs, but, ultimately, the U.S. wants to nurture business and those who wish to make a difference.
Q: One of your family business rules requires that young adults interested in joining the family business must work somewhere else first. Why is this?
A: In India, most children join their parents’ business as soon as they are of age. They end up inheriting a business, and they don’t have the education or experience required to make changes. We believe that being adaptable is very important. Our children needed to see how other businesses run, learn discipline and truly experience something else. This has helped us grow MSI, as our children have been able to think beyond what the business is to see what it could be. My husband and I highly recommend children get outside experience before joining their parents’ business.
Q: I know that you started MSI importing granite for tombstones and added tile to the business only a decade ago. How would you describe MSI today?
A: We are lucky to have built a leading company as it relates to flooring, countertops and hardscaping. Our goal has always been to be in the top three in any product line we enter. Our belief is that we have done this in each of these categories. In addition, we have been able to diversify the company as it relates to products, geographies and distribution channels. That being said, the majority of our business is flooring and wall tile.
Q: Some relative newcomers to the market-such as The Tile Shop, the home centers and Floor & Décor-focus heavily on tile. Do you sell to them, or do you consider them to be competition?
A: We have seen many new entrants to the tile channel, including those you mentioned. The way we see it is that the industry has exponentially grown since those companies have entered the marketplace. They have helped market tile to homeowners across the U.S.
In addition, along with traditional retailers, the new entrants have forced significant innovation in tile products. This includes digital printing, pavers, slabs/panels and wall tile-all made of ceramic or porcelain. These innovations would not have happened if not for retailers pushing the industry for it. MSI does sell to the home center channel, as well as the independent retailer. Both are very valuable to the consumer.
MSI is trying to help our partners ultimately win using a couple of methods:
Affordability-We are continuously finding ways to make our products more affordable to the end consumer. This increases demand and builds volume for all of our partners.
Pull Strategy-We are working hard at trend and design, marketing and merchandising to help the end consumer understand the choices that are available to them. This benefits our partners, as we do not sell direct to consumers.
Ease-At MSI, we say that we want to be a one-click vendor to our partners. That is, we strive to make it extremely easy for our retail partners to do business with us. This gives them more time to spend with consumers.
Q: You mentioned improving affordability as one of your goals. How do you do that?
A: This has been our goal from the beginning. We believe that making the pie bigger produces much more economics than splitting the pie. Our team works tirelessly to create products that can reach a large population. This includes engineering not only products but also systems, processes, logistics, freight, inventory, warehousing and more. Our goal is to reduce the price of a certain look without sacrificing the profits of our vendors, MSI or our customers.
Q: Who is the most influential person in your life?
A: I have been lucky to have many mentors in my life. There is no one person that I look to, but rather my husband and I truly believe you can learn from anyone. Nearly everything we do we have learned from America and ordinary Americans. Sometimes you learn what to do, and sometimes you learn what not to do. We spend a lot of time reading and speaking to people. And one thing we discovered early on was that listening is much more valuable than talking.
Q: What resources have helped you hone your business philosophies?
A: I enjoy reading and have learned business philosophies from some unlikely places, including movies, conversations, TV shows, periodicals and, of course, books. I enjoy biographies of successful business people, including Sam Walton, Steve Jobs and Bernie Marcus.
Some business philosophies that I believe in may seem old school, but they have worked well for MSI. This includes never spending more than you have. Debt should be minimized, and it’s important to have a conservative capital structure. I also believe that, in business, employees and vendors are your partners, not your enemies. You need to invest in them as much as you do your customers. Also, there is no such thing as a bad student, only bad teachers, which in the business world translates to mean that it’s all on leadership to make it work and be successful.
Q: What do you do in your free time?
A: It’s only recently that we have had some free time. I love to spend time with family. In the past couple of years, we have been blessed to have five grandchildren. My husband and I also believe we have been very lucky in life, and it’s important that we give back as much as possible. We spend a lot of time in philanthropic ventures, and this is a major priority in our current stage in life.
Q: What are a few things that Indians can teach Americans that would help them achieve more happiness in their lives?
A: We are Americans: 50 years for my husband and 46 years for me. At MSI, we are proud of our diversity. There are lessons you can learn from all backgrounds and people. It is our goal to build an environment and culture where we can all learn from each other.
Q: What advice do you have for people looking to achieve the sort of success that you have?
A: There is no secret to success. Hard work, perseverance, patience and a long-term outlook may not be the only components of success, but without them you are almost certain not to succeed.
In addition, respect for others is extremely important. If you truly respect others, they will go out of their way to help you become successful. I would add that there is opportunity everywhere. It’s just a matter of having the drive to go after it and not expecting results to happen immediately.
Finally, we cannot define success as the destination. My husband and I have truly enjoyed the entire journey, and we believe that is what defines success-not size, value or other purely financial metrics.