SOIL Institute of Management has been running a series of webinars during this season. Last week it was a talk with Mr Nitin Paranjpe, COO of Unilever and today it was a discussion with Mr Ajay Piramal, Chairman, Piramal Group.
Below are from the notes I took during the call:
Yours is the organization that formalises Vedic practices and has Bhagawat Gita in the office. How did that happen?
I come from a family of spiritual faith, I feel it is the blessings from the previous birth that gives you the belief in faith in this world. At the same time, people from the same family, all didn’t get the faith, so that’s also there. You need to have belief on a higher purpose and on the Lord himself. <
What is the biggest challenge you faced in your life?
The story of a young boy who had a dream – the boy is walking on a beach, he is accompanied by an older person, in the dream the major incidents of the boy’s life goes through, at some point, there are two pairs, at some other points there is one single pair. Joyous occasions are when there are two pairs (the old man is actually GOD). When tough times are happening, there is only one pair. Why is this? He asked GOD-Why are leaving me alone during tough times. GOD, replied in the tough times, I was carrying you.
When I was 23, my father passed away. We had our family settlement and that’s when the longest textile strike in the world happened. After that my elder brother, the chairman of the group passed away fighting cancer at the age of 35. I had to head the business, support the families, run the business and so on. Luckily, we had moved away from textiles, had we been only with textiles, we would’ve had it tougher.
How are you handling COVID, in your own wisdom?
When you take a flight, the take-off is not under your control, the landing is not under your control, the flight is also not in your control, there can be turbulence. Some people during the turbulence are enjoying movie/food or sleeping; others are worried. We have to realise this (COVID) is a big crisis. What we can do? focus on being composed, so we can continue our duty. The first thing we are doing is to ensure people are safe, second is “this is the time to look at the balance sheet, profitability will be low for next few years, but you have to see to that you are solvent, the liquidity is strong”. Be conservative on spending your capital, operational expense, one has to reinvent/reimagine your business. We believe this crisis can also be an opportunity.
Let me give an example, Piramal Enterprises has two business: a pharmaceutical business and a lending business. The former hasn’t been affected at all, the latter has been affected largely – but we focussed on liquidity. So we disinvested a portion (20%) of our Pharmaceutical business to a private equity firm. In the finance business, we are stronger on liquidity, we see the next year there will be less competition and we can grow our business then. I am not worried about the profitability in the short term, but on liquidity.
Your message for Students who have invested in doing an MBA which has become virtual?
This is the best time to invest in yourself. Things will certainly change for the good, if you equip yourself during this time, you will be able to take advantage of good times. So don’t plan for the short term situation.
Your suggestions for curriculum improvement in India?
There are two parts, what should be fixed, what shouldn’t be. The first I think of is value, a book by Swamiji comes to my mind – the Eternal values for a changing world. You should focus on improving one’s self, prepare the students for change, how to keep yourself open, know the basics of meeting customers, finance, etc.
What’s your response for Mr Deenadayalan’s take that people should take pride in their work, that they don’t require a separate quality control department, what’s your response?
In our case, in our pharmaceutical business though many companies have issues with the FDA, so far, we haven’t had an issue (on quality). There is more to quality in Pharma, you need an independent inspection by law. Unlike Engineering, the quality of Pharma, the bar is being raised every six months and also the reliability. Not a single tablet should be of bad quality. We don’t have only a Quality Control department, but also Quality assurance.
In 1988, your group bought Nicholas Laboratories, how did it happen?
A lawyer mentioned this to me in a casual discussion, I had no idea or background on this and there were many other interested buyers. It was the Lord’s plan that we got it. The seller should’ve liked me being a young man, it is a long story.
Healthcare around the world has become the most important because of this COVID crisis.
In India we only invest 1.5% of our GDP, the US invests on the other end at 18%, many countries do about 7%. We are the largest manufacturer of generic drugs, but we need to crack the other areas in healthcare, like diagnostics, therapy and so on.
How are going to take advantage of the current crisis?
We are a global business, we are investing across the board. We feel geography is going to be very important, local investments are important due to being resilient.
Top 3 skills of the trade, young students have to develop to make a mark?
1) This is the best time for building a solid foundation. If I may say, the so-called secular education (we have in India) is missing this. Investment in technology is also very important.
2) How do you understand the real consumer, putting him in the centre? Learn these
3) Third is understanding of the basics of finance. Learn it
What is your take on Indian managers needing to improve emotional learning/intelligence?
21st century is all about E.I. We have a foundation that does education/training leaders to be better. We have tied up with H.H. Dalai Lama on a curriculum to help on this.
Competition in Textile with China?
China has moved far away from being a competition. We have to look and learn from Bangladesh, Sri Lanka and so on. We have always fallen short of our potential. We have the know-how for 150 years. We have everything we need in terms of raw materials but we haven’t performed well. We need more to be done on reducing the regulation.
What is the next disruption? Something like Elon Musk like disruption?
Energy is going to be the next disruption. Disruptions will certainly be there. We have to be ready for it. The new design we need is one that makes us ready for handling it.
What is your take on companies investing in automation just to reduce cost by reducing people?
For me it is not either-or, it is an investment on both. The most important is to (first) ensure the business is viable, then only you can invest in anything else and on people. For that, if you need to take tough decision to reduce staffs, you have to do it, but do it in a dharmic way (transparent, for right reasons).
Could we (India) become the original drug manufacturer?
I am a big believer in India, but here I am not very optimistic. We have to really improve our education before we can do this. We have a hierarchial culture, we need that to change for focusing on research. We are good at Chemistry, but not good in Biology.
[Disclaimer: The notes above are not meant to be comprehensive or accurate, and if there are any mistakes they are due to my notes taking.]