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Veterans Unpacked | Pradip Shah: 'Create the right culture in an organization - for competence, integrity, cooperation, and empathy and respect amongst team members'

Moneycontrol logo Moneycontrol 09-06-2021 Chanpreet Khurana
a person posing for the camera: Veterans Unpacked | Pradip Shah: 'Create the right culture in an organization - for competence, integrity, cooperation, and empathy and respect amongst team members' © Chanpreet Khurana Veterans Unpacked | Pradip Shah: 'Create the right culture in an organization - for competence, integrity, cooperation, and empathy and respect amongst team members'

Note to readers: How ​do corporate leaders surf life after hanging up their boots? What do they do next? What are the lessons they learned in their eventful journeys? What advice do they have for the current crop of leaders? Veterans Unpacked is a new series of interviews aimed to offer readers lessons from retired bosses on life outside the corner office.

Pradip Shah is credited with having started Indocean, the first foreign, India-dedicated private equity fund in association with Soros Fund Management and Chase Capital Partners. Before that he was managing director of the ratings agency CRISIL, and helped found home loan company HDFC Corp. An accountant by training, Shah got his masters degree in business from Harvard University.

He is chairman of Kansai Nerolac Paints, Sonata Software, BASF (India) and director of Pfizer, Godrej & Boyce and Bajaj Auto, among others. A native of Mumbai, he continues to reside here with his wife and runs IndAsia, a corporate finance and investment advisory.

What have you been up to since hanging up your boots?

The way I see it, I have not retired but continue with my advisory activities at IndAsia, my non-executive roles at Universal Trustees and Grow-Trees.com, as well as chair three listed companies and serve on the boards of four other listed companies, a few unlisted ones, and many not-for-profit organizations.

I also help Trifecta Venture Debt Fund evaluate investments, am a member of the Banks Board Bureau, and during the last year, served as member of a government-appointed committee for economic development of Gujarat post-Covid, and as chairman of IFSC International Retail Business Development Committee.

I have recently been appointed as chairman of the advisory board of Infomo Global, an Australian-Singapore company, and as a member of the Dun & Bradstreet international advisory board. The pandemic means I am overworked, cannot delegate or goof off as I have no hologram of myself to put before a video call!

What keeps you busy now?

As I mentioned, I have a range of activities I am involved in but what I would like to spend more time on is on my charitable foundation Grow-Trees.com. The team there comes up with wonderful themes: Trees for Tribals; Trees for Tigers; Trees for Migratory Birds. Grow-Trees.com is focused on improving the environment for the benefit of all living creatures through the revenue model it pioneered. At a personal level, I do a little mediation and yoga daily and read the Financial Times and the Economist daily.

Looking back, can you tell us about three interesting events or anything that has stayed with you since?

I think getting the business model right in startups is very important, as we did at HDFC and CRISIL, both of which I helped establish. HDFC was the first retail housing finance company in India. Whatever housing finance that prevailed then had failed; at HDFC we developed the system of long-term personal lending based on income and taking alternative security which enabled financing of individuals purchasing flats under construction. At CRISIL, with no help from the global agencies, we created a model that flourished in a business that had never spread its roots outside the USA for 80 years, gave technical assistance to Malaysia and Israel, and created value for all stakeholders - issuers; investors; intermediaries; regulators; and shareholders.

I am very impressed by the boldness of talented youngsters in conceptualising ideas, having the confidence to implement them, and the latitude they get from financiers and their boards in running up losses!

One Interesting event was that when we were setting up HDFC, Mr H.T. Parekh was chairman at ICICI Bank and was occupied till the evening hours when I would update him on the day's events. In those days, IFC would send telexes that were yards long and I would describe the problems to him.  One evening, he looked at me and said: "Enough of the problems. What is the solution?" I was hardly 24 years old, and it taught me to always look for fixes and solutions.

Another instance happened at CRISIL in 1990, when we were feeling that we were not making headway. Selling the concept of a ratings agency was getting to be hard. So I turned to my boss Mr Narayanan Vaghul, who was chairman, for help. He set a date to address the team of around 20-plus professionals. He was a great motivational speaker and recognized the despondency and said that if things were to get too bad, he would help them with positions at ICICI Bank, if need be. That worked like magic, and for me it meant that motivating a team could make a world of difference.

What do you miss most about the C-Suite?

In an executive position, one can develop and implement ideas - sometimes, one wants to take the reins in one's own hand and execute an idea or strategy.

If you had to relive your corporate career, what would you do differently?

I wish I had carved out time earlier for more activities like Grow Trees.  I was keen on doing something in archaeology and indology. I wanted to start an archeology club, and even registered a trademark for it, but then gave it up. I would have also started CRISIL earlier than I did.

I would tell my younger self to take more career risks early in life, not wait to travel... In business, I would have started a company or two of my own earlier on in life.

What are the changes in the corporate world that you see now that are vastly different from your time?

I am very impressed by the boldness of talented youngsters in conceptualising ideas, having the confidence to implement them and the latitude they get from financiers and their boards in running up losses! I am also dismayed at the short-termism in remuneration structures of CEOs, the green-washing that goes on, and the inflated PR that is done on ESG (environmental, social and corporate governance) - all this is much more visible in the West.

Which business leader in the current crop impresses you?

There are so many of them, indeed so many who shine out on competence, ethics and purpose; so many one has to admire. It's not just financial achievement that makes a leader great but also the larger purpose that they serve along with their companies, and that's what separates the great ones from the good ones.

How did you plan for life after retirement?

I went to Harvard when my father had just died, and worked as a night watchman to make ends meet. Finding it too difficult, I wrote cases for a professor; at CRISIL, I was described as the lowest-paid Harvard MBA in the world. So I had no opportunity to develop extravagant taste. The savings habit was strongly reinforced from that experience. Knowing a little about companies, entrepreneurs and the economy, I was able to invest well. So finances are not a problem.

Currently and for the foreseeable future, my time is fully occupied in work-related matters; if I get a little free time, I like to read: I have a pile of books on my bedside table on subjects like Haiku and other poetry, philosophy, quantum physics, indology, that I continue reading from where I last left off. I have built up a decent home library. When the pandemic is over, we will resume travel. I continue to send suggestions to the government whether it wants them or not, and knowing full well they will be ignored most of the time.

Is there anything you would tell your younger self?

If a time machine were to be able take me back in time, I would tell my younger self to take more career-risks early in life, not wait to travel, and develop a wide range of other interests. In business, I would have started a company or two of my own earlier on in life.

What is your advice for the next cadre of corporate leaders?

Live in a way that you can be trusted to always do the right thing and work not only for money but for a greater purpose. The second is creating the right culture in an organization - for competence, integrity, cooperation,  and empathy and respect for each other amongst the team members. The third is to be able to, in one's own way, do something for others with no expectation of returns - it need not be in the form of money. For instance, at CRISIL, we recognized we could make little impact with our finances but a lot more with the talent we had and so came out with a booklet "Improving the Efficiency & Effectiveness of Not-for-profit Organizations"; at IndAsia, we have tried to be of assistance to entrepreneurs in thinking through business models or troubleshooting problems.

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