From someone who knows: How to do well in business

'In any business you have to achieve short-term goals.'
'But at the same time you have to keep your broader perspective long term.'
'It is good for business survival.'

Dr Habil F Khorakiwala, chairman, Wockhardt Ltd, belongs to a sturdy line of entrepreneurs.

His father's family bravely ventured from the then princely state of Palanpur in British India to the busy seaport of Bombay (now Mumbai) in the 1890s and set up the Akbarally Ebrahimji Drug Store on Gunbow Street in Bora Bazaar.

It later became the Akbarally Ebrahimji Pharmacy & Department Store and one of the first Indian department stores, in the milieu of the fancier stores of the pucca sahibs.

Dr Khorakiwala, born in pre-Independence India, took entrepreneurship to another level when he set up the pharmaceutical company Wockhardt Ltd in 1967.

Nearly 150 years after his family set up shop in Mumbai, he guides Wockhardt into an era of research, launching antibiotic superdrugs.

"The risk-taking ability of an entrepreneur is very different from a professional leader. That is unbeatable," Dr Khorakiwala tells Rediff.com's Vaihayasi Pande Daniel in the second segment of an eloquent interview.

• 'Whatever I have is because of India'

The India you started your business in has gone through so much change. You lived through a very critical period of India. Is it so hard to imagine how far ahead India has come. What is your vision for India?

If you look back 25 years, in every field, it was a different India. You can't even recognise it. For children born 10, 15 years ago, they can't even imagine what India was like 25 years back.

I think the India of today will be unrecognisable in the next 20, 25 years.

So that is your vision of India?

It will be moving faster. It will be unrecognisable to the people of today.

And you say that positively?

Very positively.

I believe when a socio-economic system gathers momentum, the media plays a role. Today, assessments of performance are much stronger, because of the media and because of the people than it was 20-30-40 years back.

That pushes society, the economy and the leadership to respond/change -- good or bad -- quickly.

The time (or horizon) for response is shrinking every day, with the IT system, with the Internet, with so much happening -- artificial intelligence, the medical revolution taking place. The response for changing is shrinking very rapidly.

There is a huge gap in a lot of areas where we are and where others (countries) are.

We have to cover that distance. But we are also simultaneously developing the ability to bypass one or two generations of change and move directly (ahead). That advantage we have.

When you -- especially through the work you do for the Wockhardt Foundation -- look at the India, which is left behind, does it worry you that there will be constantly two Indias?
One of which will be constantly 100 years behind.
Will the wealthy more progressive India be always leaping ahead?
Is the wealthy progressive India going to be able to pull to its level eventually the India which is lagging behind?

See, if you look at the other India, as we call it, and see what it was 25 years back and what is it today, you will see that the other India is smaller today than it was 25 years back, significantly.

The very fact that people are now talking -- for the last 10 years plus now -- significantly about education means that some changes are coming, slowly, gradually, but reforms are coming.

Also see we are trying to liberalise economically. But we have not liberalised in the social areas at all.

In education: We have old 50, 70 year systems, which are continuing.

The moment (the situation) gets like IT -- look at IT -- where the opportunity was there. All the classes came up privately and they met the need.

The moment you liberalise education per se, the structure of universities and higher education, I think there will be enough momentum to fill up the gap. The government doesn't have to do that. That is what I am saying.

Healthcare?

Healthcare, yes, the government will have to play a role.

Jobs?

See if they do the right thing, the economy grows and they take care...

And the government does less governance and unhitch itself a bit?

Yes, unhitch themselves a bit, because if the economy is growing, jobs will come, no?

There are areas like education, health, tourism which are job creators.

Manufacturing is not about job creation. I just don't understand why this chief minister and everybody wants investment in manufacturing.

A relatively small number of jobs get created compared to the level of investment you make, in the manufacturing sector, because of a high degree of new technology, automation, artificial intelligence.

It is the service sector which creates the maximum jobs. And we have 50 percent plus service sector.

And we have enough manpower to man the rest of the world...

(Laughs) Infrastructure now is a bigger area to create jobs.

From your book, it is apparent that you successfully came to terms with what each of your children wanted from life and helped them achieve it.
In spite of doing their higher education abroad, they chose to come back to India and you have them close to you (His eldest son Huzaifa runs the Wockhardt Foundation, the younger son, a doctor, Murtaza runs the pharma company and daughter Zahabiya manages Wockhardt Hospitals).

You spoke specifically about giving your children 'a grounding in India'. What are the challenges of bringing up and educating a youngster in India?
Most of our kids are westward-looking although India offers so many more interesting challenges too and also often a better life.

The level of education here is not comparable to what is available in Western countries. There is a big gap.

There is no reason why one should not go and acquire education wherever it is better, to build up one's career (Dr Khorakiwala did his masters from Purdue and later joined the Harvard Business School's advanced management programme. He received an honourary doctorate from Purdue).

The second aspect, which is also important, is that there are the right opportunities there (in the West) provided you find them.

But India, with the way we are growing, much more rapidly, the opportunities are much greater here today, than it was 20 years back.

(Then) there were no opportunities here (in India) with the kind of knowledge and experience you had. There were no jobs available.

Now there are a lot of jobs available with that experience. There is great opportunity to do what you want to do.

You will get much more satisfying jobs here. Much more challenging jobs. As time passes, that will be more so.

We had only one kind of brain drain taking place earlier.

Now partly reverse brain drain is a part of the process (taking place).

At one time 90 per cent of IIT graduates were going abroad and they were not coming back.

Now that is reversed already. It is no longer that high a percentage. That balance is good.

Even if somebody works abroad and after 5, 10 years wants to comes back, s/he brings experience and richness when s/he comes back and contributes (to India).

Some may return and some may not return. But the greater percentage is likely to return provided the opportunity is there.

And if they are wise enough to see that?

It is not wise enough. It is a dimension of ability to risk.

Everybody has a different degree of (desire for) comfort in life. Some want to be very stable, steady and don't have great ambition.

If they find that kind of job (over there) they will stay there.

Those who have the energy and want to do something (will return).

You will get people back with a lot of energy and risk-taking ability to my mind and that is even better.

So even if you get half or even 1/3 of those people, they are the better ones who are coming back. (He smiles, his eyes twinkling). They are hardier. And the ones who want to do something in life.

But when you refer to this word what did you mean exactly: 'They had a grounding in India'.
What are the positives of a grounding in India?

They study here, they remain in the family.

I think, it depends, as a family, how you remain attached to your children. That makes a difference.

If there is no attachment in the early years of their life, then it doesn't matter to them. So that is one attraction to coming back, let's put it that way.

The other would be if the opportunities coming back here are significant enough for them to be worthwhile.

You speak a lot in your book about family-run companies going through upheaval and India being a country of entrepreneurs because businesses are family-run.
But is there a point when that doesn't work? When companies should be professionally managed as opposed to family-managed?

Basically, there is this concept (belief)... that if it is not a family company, it is professional. So we segregate companies as family-owned versus professional.

Personally, I believe it is a myth.

Which is a myth?

The whole belief is a myth. That the professional companies are much better managed than family companies. It is a big myth going around.

Both can be equally well-managed?

Equally well-managed. Or equally badly-managed.

The very fact that it is a professionally-run company does not necessarily mean that it is better managed. Some are very well-managed. Some are badly-managed.

(And when it comes to) family companies, some are very well-managed, some are badly-managed.

Family-run or professional, the belief that one is better than the other is not correct.

The second aspect is that yes, professional organisations are system-oriented and this oriented so and so on, which is good.

Family organisations are not necessarily. But some are.

The ideal combination is of entrepreneurship and professionalism (together), because risk-taking ability of an entrepreneur is very different from a professional leader. That is unbeatable.

In very few professional companies will you find the combination of a leadership who is an entrepreneur and still professional.

It might be a small percentage of companies, but a well-run professional company with an entrepreneur (heading it) has a better advantage.

So basically you are saying that a family-run company which has entrepreneurial spirit needs to have professionalism or vice versa a professionally-run company needs to have some entrepreneurial spirit?

There is a lot of literature done, in management, on how to bring entrepreneurship into companies in the West, mainly because of this ability (of an entrepreneur) to risk.

The second aspect is that in a family company, with professionalism, the perspective is not short term. Its perspective is relatively long-term.

I think in any business you have to achieve short-term goals. But at the same time you have to keep your broader perspective long term.

It is good for business survival.

• Part 3: 'You can't succeed without taking risk'