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Lunch with BS: Rahul Khosla

A leap of faith

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Taking the jump to a promoter-driven business has been rewarding for the because of his chemistry with the chairman

Rahul KhoslaIt happened quite serendipitously,” quips Rahul Khosla when I ask how a dyed-in-the-wool multinational banker arrived at a promoter-driven, healthcare-to-insurance firm Max India. It turns out that Khosla started out as a bean-counter with Ranbaxy, the pharma company of the then undivided family, in the same building in Okhla, a suburb of the capital, that houses his corner office now.

Khosla left in 1986, found his calling in consumer banking and worked with the best in the business, from Amex, Bank of America, ANZ Grindlays to Visa. Meanwhile, the Singh family had an acrimonious spilt, with the youngest son, getting Max, the crown jewel Ranbaxy going to eldest, Parvinder Singh. In 2000, in between jobs, Khosla met Analjit Singh at that latter’s London home. Nothing much happened, but the two parted on a pleasant note, a “we’ll meet again” type of situation. Khosla headed to Singapore with Visa, built a life there, and even became a citizen of the city-state in 2006.

So, when the headhunter call came in early last year for the CEO’s job, it wasn’t exactly cold turkey for Khosla, who was recovering from a major knee surgery in Sydney, writes Shailesh Dobhal.

“These strange coincidences strike you, I guess, only once they have happened,” says a jovial Khosla as we settle down for the lunch at Indian Accent, a relatively new and unexplored East-meets-West fusion food do at the capital’s tony neighbourhood in Friends Colony.

But I am still searching for an answer to what really clicked for him to take up the Max job. “Well, my meeting with Analjit in May last year was one of the finest I had had with anyone, ever. The value system, the chemistry matched and I was really charged up that here was someone I can work with.”

Almost three decades in banking, didn’t he think of venturing on his own, a financial sector entrepreneur of sorts, much like many of his ilk? He brushes aside the idea, saying, “I was always in consumer banking and the joke was that the carpet ends where retail begins.” On a more philosophical note, he says he believes in being less than deterministic about one’s future. “Being a little bit more flexible and trusting your competence, values and integrity and carrying it to [new] situations has more value than being too prescriptive on what you will or won’t do.”

I suggest we order the main course before resuming our conversation, which is warming up even as it pours outside. Khosla says he’s a vegetarian by taste, not belief, because he finds the flavour of meat, particularly seafood, too strong for his palette. He goes for “Chowpatty in a bowl”, which the menu describes as “tempered ricotta vada, pao bhaji, kafir lime butter pao”. I settle for fish in “rolled john dory moilee with idiyappan stacks”. And traditional lemonade, masala shikanjvi, for both.

It turns out he went to a Delhi school, St Xavier’s on Raj Niwas Marg, whose well-kept grounds I often use as my running track these days. Pre-Independence, the school was the Cecil Hotel, and the main building porch a give-away of its former identity, and the alumnus and I exchange notes on the lay of the land there. Khosla did his undergrad at St Stephen’s College, chartered accountant article-ship at AF Ferguson in early 80s Bombay, and joined Ranbaxy in 1984.

Does he miss Singapore, his home for the past 11 years? “Yes, very much. What I miss is Singapore’s calmness. In India, you’re never alone, because someone is always doings things for you here.”

And what about golf? “Yes, I miss that too since somehow I have not been able to play much after relocating to India, I guess the settling-in took time.” Khosla says he’s always been an animal lover, and grew up with dogs, but now, thanks to his wife, he’s become a cat person. “You’ll be surprised how loving cats can be; it’s just that they have a different way of showing it.”

He’s over a year old in the Max job, so what’s his view on the group? With a portfolio that stretches from hospitals, life and health insurance, even specialty foils, how does he define the knitting? “Our businesses are around critical-time interaction of the consumer with the firm, whether it’s at the hospital or redemption of a life insurance policy. It’s not a normal consumer-business interaction in the sense of just buying something, a shirt or a compact disc. The connectivity of thought and of approach is important, and that alone determines the businesses we do or do not get into.”

But hasn’t Max’s promoter dabbled in and out of various businesses in the past, more an arbiter than a believer of core competence? “I am joining in the phase [of the group] that started end 2010 and the DNA is of seva bhav,” Khosla replies. “So I will not be a manager who will hang a shingle to say we will be a Rs 60,000-crore group [from the current Rs 9,000 crore-odd], because I find that laughable, even dangerous. It’s not that we want to be soft on ourselves, but I don’t want us to lose out on the clarity on the thoughtfulness of the businesses we do and how we do them.” To Khosla, what’s most critical in a service business is not to grow too fast and lose the plot. “Analjit is an outstanding entrepreneur and I think I bring outstanding business performance management, and the complementarity will demand outstanding performance from everyone, including myself, even while we don’t hang the shingles.”

Khosla finds the lemonade too sweet and the gentle lady serving us graciously gets another to his liking. The discussion veers to the Rs 516-crore Max-Life healthcare deal that Khosla help sew up last year, day one on the job, flying straight from Singapore to Johannesburg instead of reporting in at Max’s New Delhi headquarters. So how’s the partnership panning out? “Couldn’t be better in terms of the nature of partners. They are bringing in expertise, operational knowledge, capital and huge collegial approach in helping us manage the network [of Max hospitals].”

How is he coping with the switch from operation-intense roles to a holding company chief executive at Max, I ask. “A good manager is one who can one minute look at things in a granular way and yet the very next go 40,000 feet up and take a perspective and do it all day long, day after day,” says Khosla. And a holding company, much like Max, needs that approach, to keep operating companies accountable to business performance, help them operationally when they need you, and yet not interrupt their operational independence, according to Khosla. “In a holdco structure you make sure that your framework for measuring success is clear to yourself, to the board and to the operating companies.”

As an inquisitive, sceptical hack, I couldn’t resist asking what gives him confidence that this professionalisation of management at promoter-owned companies much like Max is for keeps this time, when business history in India is littered with promoter families who came back with a vengeance. To his credit, he didn’t duck my question. “Because promoters are realising its good for themselves, their families and the business.” I press further. Why did Analjit Singh do it? “The degree of what it takes to run it as a group now is way, way beyond what anyone in the family, including him, can do. But it’s Analjit’s conviction that in order to grow this group in the right direction he knows he will require this [professional] model.”

Khosla adds that he had the best induction programme in his career at Max. “Analjit and I converse every day, three times a day. And it’s not about what should I do or please do it. It’s a conversation and not an update or an approval but its seeking views, discussing implications, questions and advice flows both ways. And, therefore, to me, the actual behaviour, the warmth that comes through within the group also drives my confidence.”

Khosla finds his “Chowpatty in a bowl” very good, but filling, and declines dessert in favour of black black coffee, and the conversation moves to Singapore, golf, family, and much else.

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