Not here to sack people: Shanghvi to Ranbaxy staff
I am not here to sack people, that’s not my style. I believe in continuity and if you look around our company’s senior management team, most have been with me for years, Dilip Shanghvi, promoter, Sun Pharma, told senior Ranbaxy executives in a closed-door meeting at the Taj Lands End in Mumbai, called at a short notice in the second week of July.
Ranbaxy country heads from different parts of the world had gathered in Delhi for their periodic performance review, and were in for a surprise when they were summoned for a meeting with their soonto-be chief.
I may assign new roles to people and do not expect them to be masters at their job. But they should constantly learn on their jobs, Shanghvi is learnt to have told them.
Dressed in his characteristic crisp white shirt, Shanghvi spoke softly and said he preferred to take questions rather than launching a long speech. This was the first exchange of the kind between Sun’s top boss and senior brass of Ranbaxy since the Mumbai-based drug firm announced in April that it will acquire the rival from its Japanese parent Daiichi Sankyo in the largest domestic pharma transaction worth $4 billion.
PEOPLE & PERCEPTIONS
Shanghvi said that every time a division in his company underperformed, and an assessment of the cause was carried out,the company realised it was because of losing some valuable people.
So, I don’t believe in losing people. And when it comes to hiring, he said he either hires the best, or those from whom he thinks he can extract the best. On speculations around possible workforce trimming in Ranbaxy post deal closure, Shanghvi tried to dispel anxieties of the Ranbaxy senior management.
“All my life, my focus has been to grow the business. The need to expand this business will require many more people than what we currently have,” he is understood to have said.
“What I have realised is that when we have disturbances, the focus is diverted more into managing those disturbances rather than managing growth,” he said, assuring that whatever Sun will do in Ranbaxy post integration, it will do so with the least amount of disturbance.
Admitting that there’s a perception that Sun and Ranbaxy do business in different ways, he said, “I know those sitting in Ranaxy have certain perceptions about Sun and those at Sun have some perception about Ranbaxy, some of which could be true, but many of them are far from real.”
He conveyed that these perception gaps would be cleared after the integration.
Shanghvi further said that the Ranbaxy acquisition is very important to him because Sun has never done a deal of this size and complexity in the past. He also emphasised that he doesn’t want to go wrong on anything, and doesn’t want to be unfair in any way.
And the thing he would strive to do is to create an apolitical environment where people can be rewarded after objective reviews.
TARO LESSONS
Citing his record at Taro, a previous acquisition in Israel, which Sun has managed to turn around, Shanghvi pointed out to Ranbaxy executives that besides appointing Kal Sundaram, the chief executive officer, he hasn’t made any significant people changes in the company in the last four years.
Soon after the deal, seven-eight top executives at Taro left after the senior management triggered change of control agreement, Shanghvi said. “At the time we had just met second and third line people in the company. We decided against hiring from outside and filled the vacuum at top by promoting existing employees,” he said, according to people privy to the event.
He said at the time of taking over about 3% of Taro’s turnover was spent on airlifting drugs from Israel — the manufacturing base — to the US market largely because of the production delays, something the Taro employees fixed after being given the responsibility to do so, which became one of the many critical inputs in the business picking up.
Without much significant investment, Shanghvi said the service levels in this area improved to 98% on last assessment from 90% during pre-acquisition times.
ACQUISITION, A LEARNING OPPORTUNITY
Reminiscing about the days when he was engaged to marry, he related incidents about how he tried to impress his wouldbe wife by telling her that if they ran the business well, they could earn Rs 1 crore a year.
At the time, he had set up one plant at Vapi in Gujarat, which generated monthly sales of Rs 60,000. Citing the difference between his aspiration and achievement, he asked Ranbaxy executives never to underestimate themselves.
“I believe the people I work with are far more capable than what they think or what I think,” he said.
“We never get into acquisitions with the mindset that we know everything. Every experience has taught us valuable lessons,” he said about the nine-odd companies Sun had acquired in the last decade, adding that he is confident that even the Ranbaxy acquisition will help them learn many lessons.
A Sun spokesperson refused to comment on the matter and Ranbaxy didn’t respond to an ET mail seeking comments on the meeting.
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