"Jugaad is not a good word"

GV Prasad

GV Prasad

G.V. Prasad is co-chairman and chief executive officer (CEO) of Dr Reddy’s Laboratories Ltd, India’s largest pharmaceutical company by turnover. The firm he heads has over 16,000 employees across the world, and manufactures 190 medications and 60 drug ingredients, diagnostic kits and other biotechnology products.

Between 27-30 November, Prasad will be a resource leader along with Ratan Tata, chairman emeritus of Tata Sons LtdRam Charan, acclaimed CEO coach; and Sadhguru Jaggi Vasudev, who built the Isha Foundation. At the foundation’s campus in Coimbatore, between the four of them, they will lead a residential programme tailored for entrepreneurs called Insight: The DNA of success. The intended outcome is to explore what comprises the mind of an entrepreneur and how do they go about seeking success. Edited excerpts from an interview with Prasad:

How would you describe yourself outside your role as an entrepreneur?

I am not deeply religious or spiritual. I am not drawn to any particular theology or guru. My biggest passion was the organization and how to take it to a level where it is recognized for its work in innovation, people practices and governance. These are three areas I think we want to be distinctive. Beyond that I am the average Joe.

As an entrepreneur, what have your learnings been over the years?

First, to build a business, you need the best talent. You cannot achieve extraordinary results without extraordinary people. You’ve got to surround yourself with great people.

Second, I believe if you do the right thing, success will follow. That includes doing the right thing for your stakeholders, customers and employees. You don’t have to make trade-offs for any one person’s sake. On the contrary, if you choose to pursue success in terms of financial numbers, you will fall. I have seen many entrepreneurs fail because they have not been holistic about what they do.

Third, every business must have a larger purpose. If you know what problem you are solving, you align all your strategies and resources to that problem.

What is the larger purpose for the organization you lead?

It is quite clear. We are trying to improve the health of people. We do it through innovation and affordability by improving on products that exist or finding new products. Or making them more affordable for that matter, especially products that are difficult to make, which have scientific and technological barriers. We focus on those products to reduce the costs there. In fact, we are improving access to affordability.

In the Indian context, innovation and affordability have been a function of ‘jugaad’, or that is what we have come to believe. What is your take on that, particularly in an industry that is as critical as yours?

In our industry, it is difficult to say jugaad will work. We are dealing with human beings, health, potent systems and hence quality becomes important. Jugaad is not a good word in the pharmaceutical industry. It means “make do”.

In our industry, the pursuit of excellence and the highest element of quality is very important. Look at recent problems people have had to face because of drug sterilization issues. You can see how dangerous it can become if you don’t have a mindset of absolutely high quality.

So what does it take to pursue affordability and innovation both at once? Are there some learnings you’ve had in the pursuit of both these objectives simultaneously? Are there learnings that can be exported?

Absolutely. Affordability is a platform. It does not mean we are looking at making things at the lowest cost. When we mean affordability, we think about competition and how will it be difficult for them to replicate it.

We think about scientific innovation. We innovate to make things more affordable, better and efficacious without allowing room for trade-offs. Sometimes if you look at the success stories of India, like that in the automotive industry, just rushing to affordability has not worked. People want better quality and a better product. You can’t trade-off on these things. Innovation lies in doing both simultaneously.

To your mind, what does it take to be an entrepreneur? Can anybody be one? Can you possibly evolve into one? Or can the traits an entrepreneur requires be acquired?

I don’t have a strong thesis on this. All I can say is that entrepreneurship is an intense journey. You have to be highly motivated with what you are doing. It is not about making money. It is about solving an important problem and doing it innovatively to create value. It demands you be innovative, passionate and tenacious. It takes a long time to make a business work, especially in a country like India where the ecosystem is stacked against you.

I don’t know if an individual is born with these traits or they can be acquired. But when all of these traits come together, magic happens. It could be the context in which an individual becomes an entrepreneur, or that by nature he is very curious and is a problem solver.

If you were to step back and look at the Indian landscape, what is it about small and medium enterprises that stands out as opposed to those in other parts of the world? Are there traits that are uniquely Indian?

Every entrepreneur creates magic. To build an enterprise, or to build a successful business one needs to work passionately, with limited resources, and make it work in a time-bound manner to deliver a product or service that meets a real need. This works differently in different parts of the world. If you take the US, it is an intensely competitive environment, but it is also one where failure is tolerated. You can pursue big ideas, fail and there is no stigma. For Indian entrepreneurs, it is a one-way street. If a guy fails, he doesn’t stand a second chance.

I guess that is why a lot of Indian businesses are not built on the back of innovation, but by getting access to resources, access to government and power, access to land, and so on and so forth. Real innovators are not the thriving majority in India. Only in the recent past the IT industry has shown you can build businesses without patronage. It is the only industry in India that has used manpower as an asset.

To that extent, Indian entrepreneurs are more focused on the cost side of the equation than the innovation side. That is a fundamental difference I see between Indian entrepreneurs and global ones.

How much does that bother you?

I think it is changing. I see a new breed of entrepreneurs trying out new things. There are e-commerce companies coming up and scaling rapidly. We are in the early stages of a revolution.

Are there any specific ones that stand out to your mind?

All the companies that are looking at creating value out of Intellectual Property—you can see quite a bit of them in the IT and biotech industries. Even in the old traditional industries people are reinventing themselves. It is too early though to talk specifics. But what we are seeing is positive.

And what about family-managed businesses (FMBs)? Are there peculiarities you see? Is the patriarch still in charge? Are there conflicts that come to mind?

I see people willing to give up control to professionals. What Infosys did was a remarkable thing. We are seeing families willing to step back and behave more like investors and strategic architects as opposed to operating the business. But there is a long way to go.

What kind of pain points should entrepreneurial entities be prepared for as they begin the scaling-up process?

Sadhguru Jaggi Vasudev makes a point that when a trapeze artist is swinging, he is confident that when he lets go, he will find the next swing, latch on to it and move ahead. Unless you have the confidence that there is a swing out there you can latch on to and move ahead, you cannot let go. This is the biggest dilemma I have seen in family businesses. This prevents them from taking important decisions. They are unwilling to let go with the risks of letting people make mistakes, particularly in FMBs.

If you don’t want to grow and want to be in a corner, and are happy, that is perfectly fine. But if you want to grow, scale up and create large impact, there are certain things you have to do. To do that, you need to grow beyond the Founder’s Syndrome.

Personally, how important is scaling up to you?

We are a company that has let go. We wanted to build a global organization that can sustain itself through changing generations, people and technology. For us it was an easy decision. We are a listed company and are not an SMB (small and medium-sized business). We had to do what was right for us.

What are the challenges that accompany the pursuit of growth and how do you decide the pace at which you grow?

The readiness of your people and their capacity and the imagination of the leadership in your enterprise—these are the limiting factors. You need to have a big vision, and the people to execute them. Both of these are like Yin and Yang. Without great people, you cannot execute. And without great vision, you cannot have great people aligned.

How easy or difficult was it to let go and what did it take to come to that point when you took the call that we have to do it now if we are to grow?

You realize it quickly when the organization around you is falling into a rut and are not able to execute fast enough, meet the demands of growth and understand where the constraints are. Often times the constraint is the leader himself. His ability to think, get people on board and get them to deliver. It is not an event. It is a process. You don’t do it suddenly. You do it by preparing your people, organization and gradually change the questions you ask of people. You stop taking all the major decisions

Can you give some sense of what kind of questions you would ask people in this process?

When you are in the operative mode, you look at what problems to solve, identify the problem and offer solutions. As you become bigger and have a better team, you don’t ask what problem to solve, whether your people can see the problem or understand what is coming. You look at people and their capabilities. So the nature of questions you ask are very different.

In the early days when you are trying to survive, you look at the profit and loss statements very closely. Later on, you look at what capabilities are you building and how are you doing things? Are they sustainable? Do you have a pipeline of people? That’s how the kind of questions you ask changes.

What is the point at which an entrepreneur calls it quits or are entrepreneurs the kind of people who have to persist no matter what the odds are?

In an enterprise, there are many phases of growth. In the initial days, the viability of your product and business is essential. There you need a close-knit team and be on top of everything. As you become viable, build and expand, you have to transition your leadership. I am not saying an entrepreneur has to quit, but he has to constantly reinvent himself. And at some point, if he is unable to reinvent, he must move on. The entrepreneur’s role is very context specific. I don’t think he has to quit for an organization to succeed. There are many cases of entrepreneurs leading brilliantly to the end of their lives. They are the ones who are always learning and growing.

From your personal experience, how often have you been compelled to reinvent yourself? Do any instances come to mind when you have had to change yourself dramatically?

I can’t call it dramatic change as much as constant evolution. With each change in the organization, I have had to change myself and the work I do. Initially I used to be running a business and used to know everything that is happening everywhere. From there we reached a point where we had to build end-to-end business units for everything. As time passed, I started to look at strategy, talent and culture as opposed to performance. At each stage in the organization’s evolution, one has to adapt.

When it comes to intrapreneurs within an organization, what differentiates them from entrepreneurs?

They are the same. These are people who see the same issue and think up different ways to do things that can add greater value. They look at the same set of resources and make the organization more productive or solve a significant problem.

Are the two interchangeable?

I would think so. If an organization allows space for people, they should be the same.

You mentioned you are not a particularly spiritual person. But assume for a moment there is conflict in an entrepreneur’s life when he has to straddle the domain of spirituality and pragmatism. How does he do it?

I don’t know what the meaning of spirituality is. I have never understood that fully. But do I reflect on things, do I have a strong value system, would I do anything that goes against my value system of what I believe in? On these, I am clear I will not do anything that goes against my value system. I wouldn’t call it pragmatism. I would call it the wrong thing to do. Those are convictions we carry. I don’t know if that is spirituality. But if it is, then we won’t compromise.

What if you were faced with a situation where you have to stand up for your value system on the one hand and growth on the other hand? Do situations arise when both of these are mutually exclusive and are there ways to resolve it when they are?

I have one answer for this. If you look at the long term and not the immediate or short term, in the long term it is always more attractive to follow your values.

Can you think up an instance when you were compelled to take a call and stay put on the long term and give up on growth in the short term?

Right now we are spending 11% on research and development. It is a lot of money. I could cut these costs down and increase both my profitability and share price. But the long term would be compromised. Similarly, I could cut back on investments in quality, safety and environmental protection. But that is not sustainable. The answer to all these ethical dilemmas is to look at the long term 10 years down the line, or even 30 years, and you won’t trade-off for the short term.

How do you explain that to shareholders who want immediate returns?

Shareholders understand if you tell them. But you have to be performance-oriented. You cannot always hide behind the shield of long term. Show them progress and give them enough, so they trust you are investing in the long term. It is difficult, but not impossible.

Most of us tend to be one-dimensional and focus only on one part of our lives as humans, which takes precedence over the other parts. What has your personal experience been like?

In the initial days of my career, I was also one-dimensional. I realized that as a result, I was not a complete package as a leader. So it became important to seek out people with contrarian points of view because they guard you against biases. They shine a light on your lack of perspective and expand it.

I sought out experiences, friends and advisers to become more complete. I found inspiration from speakers at conferences, books, and over the long term, developed more interests that have helped me become a better businessman.

For example, I like wildlife. My visits to forests made me more environmentally sensitive. I use what I’ve gained there to make the organization more effective in formulating environment-friendly policies.

If I go to an event, for instance the F1 Race where I ran into Sadhguru, watching the pit stops and the wheels change, you understand that you can reach impossible levels of performance if you focus down and set yourself targets. Something like that can help an organization do work that is time-sensitive in a very effective way. And all these experiences are portable across various contexts.

What is the one belief that you used to hold close to your heart that you have now changed?

I don’t know if I have changed any fundamental belief. I think I have become a better and more effective leader. But I can’t think of any belief that I have had to discard.

This interview was published in Mint on November 25, 2014. All copyrights belong to the newspaper & it may not be reproduced without permission from the publishers


When will you die?

That you will age and die is a given. The questions are when and whether it will be miserable or graceful. Short answer: expect to live to be 100. And if you are like most urban Indians in their late 30s and early 40s who maintain an awful lifestyle, expect to die miserable. That is, unless you mimic the 38-year-old Vikram Sheel Kumar—physician, researcher and entrepreneur—who shuttles between Boston and Delhi.

Until three years ago, he was willing to punt he’d live to be 120. For various reasons, he has since lowered the bar: “I am older and wiser now, and would be happy with 100 healthy years. To get there I take some pills, like a multivitamin, fish oil, vitamin D and glucosamine. I don’t drink alcohol or smoke cigarettes, and exercise daily. Nothing too exciting, but I don’t really think excitement gets you a century in this game.”

Then there are optimistic extremists in the life expectancy camp, like Aubrey de Gray. A British gerontologist, he vociferously argued that ageing is a disease, it can be cured, and that somebody living right now could live to be a 1,000.

Michael Rose, among the world’s foremost evolutionary biologists researching ageing at the University of California, Irvine, thinks de Gray’s argument is bunkum. “I don’t think ageing is a disease by any reasonable definition of the term disease,” he argues. “I don’t think it is possible to simply cure it. But I do expect that this century will see biomedical research tame it to the point that it is no longer devastating. People born after 2050, I predict, will start to live two or more centuries. People born after 2000, I predict, will frequently live to 100 or more,” he said in an email interview.

Be that as it may, all camps converge on the point that biological immortality is possible—a stage in a person’s life when they stop ageing. This is not to say you won’t die. But crudely put, this is the point when it is impossible to tell your age by physical appearances. For instance, in most cases, you cannot tell the difference between an 85-year-old and somebody who is 90.

By way of example, Kumar points to the 75-year-old Ramesh Chauhan, chairman of Bisleri International. “He is a really smart person. He controls his destiny to an extent, at least as far as work goes. So he is not retiring anytime soon. He just launched a new energy drink and is having the time of his life. He has kept his mind and body young by taking an interest in the little things in life. Sure, some would say that is micro-managing. But caring about the details means always being on. I don’t believe we age by doing too much. It is when we stop to do, or turn off that we age,” said Kumar.

But scientists like Rose are hard at work in trying to lower the age at which people hit biological immortality. “I think that dietary and activity changes, better tissue repair, and genomically-informed pharmaceutical development can be combined in our lifetimes to make the rate of increase in mortality and age-associated diseases less dramatic,” he says.

“The kinds of experiments we have done with Drosophila (a small fruit fly used in genetic research) have been emulated on a smaller scale by scientists working with other insects and mice… There are already clinicians and biotech companies interested in using my ideas. However, they have not yet achieved enough impact to affect the lives of many people this decade. Maybe next decade will be better. We’ll see.”

To put it mildly, Rose is understating the significance of his work. As early as 2004, David Sinclair and Christoph Westphal co-founded Sirtris Pharmaceuticals. The company’s stated mission was to develop drugs that harness the body’s immune systems to fight ageing. Some breakthroughs with yeast (a microscopic fungus) later, the management at drug maker GlaxoSmithKline (GSK) reckoned the breakthroughs could potentially be deployed to arrest the debilitating consequences of ageing. In what was seen as a contentious acquisition, GSK paid the founders $720 million way back in 2007. Pharmaceutical industry analysts thought this was too high a price to pay for a nascent, untested technology. But if anything, it highlighted the kind of money Big Pharma is willing to bet on backing anti-ageing research, or the elixir of youth if you will. Then last year, under equally contentious circumstances, GSK shut Sirtris down. The official line was, “integrating into the larger company will grant the programme better access to GSK’s chemistry, biology and pharmacology teams”.

Coming back to the point, when Chauhan’s lifestyle is extrapolated with Rose’s work, Kumar reckons, on average, urban Indians now in the 40s will live to 80. Statistically, this means that the probability that most people reading this newspaper will live to be 100 is high. And that is where the problems begin. Because living to be 100 is one thing. Living healthy until then is another thing altogether. As acclaimed author and physician Atul Gawande points out poignantly in his most recent book Being Mortal: “Old age is a continuous series of losses… Old age is not a battle. Old age is a massacre.”

Add to this the mindset most of our policymakers and we are weaned on. That we ought to retire at 60, or 65 on the outside. Rose dismisses the idea outright. “I think universal mandatory retirement ages are now of little value,” he says. He’s got a point. Because if life expectancy goes up 40 years from the time you retire, how are you to fend for yourself for the rest of your life?

Much has been written as well about India’s demographics and how it will be the youngest country in the world by 2020. What isn’t spoken of is that 15 years from now, India will have at least 120 million senior citizens. This number doesn’t include those in the late 30s and early 40s. Bunch them and estimates reckon there will be 330 million seniors (the entire population of the US in 2012) slugging with an impatient next-gen to earn a livelihood. But most people don’t get it. “People cannot fathom their increasing lifespan in the same way as it is hard for a child to see how tall he is becoming,” points out Kumar. The question then is what are we to do?

If anything, Chauhan is a pointer. You’ve got to keep reinventing yourself. Second and third careers will be par for course. That means you don’t stop at investing for your child’s future education; you also invest in reskilling yourself. It is entirely possible that the skills you possess now will be redundant when you’re past a certain age. Because “…specific high-risk occupations that require high levels of stamina might require regulation with respect to measurable physiological competence”, points out Rose.

That said, not all is morbid. Gawande writes, “If we shift as we age towards appreciating everyday pleasures and relationships rather than achieving, having, and getting, and if we find this more fulfilling, then why do we take so long to do it? Why do we wait until we’re old? The common view was that these lessons are hard to learn. Living is a kind of skill. The calm and wisdom of old age are achieved over time.” In other words, with some discretion, it is possible to age gracefully. More importantly, as life expectancy increases, the life skills that Gawande alludes to and come with age can be enjoyed for much longer than people do now. That is a pretty damn good reason to live to be a centenarian.

This article was first published in Mint on November 14, 2014. All copyrights vest with the newspaper and it cannot be reproduced without permission from the publisher