Khurram Hamid – Global Strategic Projects P&G

Ø Last year when visiting Karachi, the billboards were that of the telecom companies and the financial services. This year the broadband companies like PTCL and Wateen have taken the lead.

Ø So there’s a definite paradigm shift happening which many people are not aware of.

Ø An idea however brilliant it may be is not enough.

Ø A profitable business model, venture capitalist, and consumers with a need all of that is essential.

Ø Pakistan has a reported 20 million internet users, but where are the start-ups to capitalize on this huge market?

Ø There’s a Connect & Develop Hub in India but not in Pakistan.

Ø If you have a great innovative idea, submit it on www.pg.com.

Ø (Khurram also showed that famous presentation ‘Do you Know?’ which shows the breathtaking pace of how new media is turning the way business is conducted upside down.)

GLOBALIZATION AND COMPETITIVENESS:

Panel Discussion –

Shehzad Dada – CEO Deutche Bank AG, Pakistan

Ø Trade accounts for 30% of Pakistan’s GDP. It accounts for 38% of India’s GDP.

Ø Pakistan’s key competitive advantages are

o Strategic Location

o Fertile Land

o People

o Selected Natural Resources

Ø Pakistan have historically been used as a backyard for the world’s superpowers for their own interests.

Iqbal Ibrahim – Managing Director Al-Karam Textile Mills

Ø Cotton yield per acre in Pakistan is far less than India’s.

Ø The minister is predicting 20% growth in the textile sector. How to achieve it when there’s a 14% slump in global sales?

Ø There ought to be a roadmap. People need to be taught how to grow more with less.

Abdul Rahim Janoo – Chairman Rice Exporters’ Association of Pakistan (REAP)

Ø Pakistan has become the third largest rice exporter in the world beating both India and the US.

Ø Biryani Festival in numerous cities all over the world like Johannesburg, Dammam, Amsterdam has been used as a marketing strategy to brilliant effect.

Ø Wheat thrashers used instead of rice thrashers which reduce yield as much as 25%.

Ø Export has gone exponentially from 300 million to 6bn in just over 5 years. Even 10 billion can easily be attained if the government provides support.

Iqbal Ibrahim:

Ø We need to know the rules and follow them diligently. We continue to live in our own small pond and think we are the ‘Magar Mach’ (Crocodile) of that pond.

Ø Forte of Pakistani cotton is its ruggedness. It may not be of pristine quality like the Egyptian cotton which is grown on the banks of the Nile and as such has ample amount of water available.

Ø The same cotton cannot be grown in Pakistan because of the water issues as well as the fertility of the land.

Ø While the Egyptian is ideal for making premium segment clothing, Pakistan’s is good for making bedsheets.

Ø The $25 billion target to be announced later today in the Textile Policy is a fantasy because we don’t have the port capacity to achieve it. Unless we increase the value of the existing export by a factor of 4 or 5 which in the current competitive environment is virtually impossible.

Syed Ali Raza – Chairman National Bank of Pakistan:

Ø The $25 billion export target is not unrealistic. It may not be achieved in one go, but over a period of time it can be attained. The thing to remember is that we need to set ourselves stiff targets to make utmost use of our potential.

Ø I was supposed to comment on the state of the financial system, but what can I say? It’s all been a shame the way the world financial system collapsed and still is in trouble.

Ø Pakistan’s banking system was spared the agony because it is still a first generation system unlike the two-tier and three-tier systems of the West.

Abdul Rahim Janoo:

Ø Just 30 exporters out of a 1000 rice exporters account for 25% of the total rice export.

Ø One single exporter operating from Karachi exported 300,000 tons out of the total 3 million tons alone.

Ø Pakistan have the best basmati rice in the world. This has been acknowledged by the foreigners themselves.

SOCIAL ENTREPRENEURSHIP :New Rules of Business Engagement

Roshaneh Zafar – Founder and Managing Director – KASHF Foundation

Ø Will begin with a story about our founding father Muhammad Ali Jinnah.

Ø It’s the Ritz Hotel in London where many of the world leaders are gathered for some summit. For three consecutive nights, the hotel manager saw that the light of one room remained switched till late in the night while everyone had gone to sleep. This was Jinnah’s room. On the fourth night the manager went to inquire whether everything was alright and why Mr. Jinnah could not sleep while all the other leaders were asleep. Jinnah said that all the other leaders were asleep because their nation were awake- I have to be awake because my nation is asleep.

Ø So it’s high time for us to wake up before its too late.

Ø Muhammad Younus, the founder of the Grameen bank said, ‘Why leave business for the rich and charity for the poor? Why the poor can’t be entrepreneurs?’

Ø Only 11% of the population in Pakistan have access to financial services.

Ø Only 4% of Pakistani women have access to loans or any form of financial services.

Ø 89% of the total population is branded as unable to run business.

Ø This is an economic apartheid.

Ø <;/span>89% of the population translates into a huge marketing opportunity for the financial service providers if they are shrewd enough to capitalize on it.

Ø Jeffrey Sachs once said about micro-finance that it is not a zero-sum game, it can be a win-win situation for all the parties involved.

Ø One of the key principles of our micro-finance system is that the bank will come to you instead of the customer going to seek help and it will remain in constant contact throughout.

Ø Pair collateral introduced – two or three people will vouch for each other.

Ø If you liberate the woman – you liberate the man.

Ø Kashf Foundation started out in 1996. It has a customer base of around 1000 clients now.

Ø Poor people have needs as well, so consumer loans are being offered to them.

Ø The Madadgar Loan is one such product of ours, which is an emergency loan available within 24 hours up to Rs. 4,000.

Ø Home improvement loans were also being given but have been discontinued due to the recession.

Ø The poor also need health and life insurance and we have worked with some of the conventional insurance providers to facilitate these insurances for the poor.

Ø Solar energy is going to be covered in one of our products in the future.

Ø Kashf Microfinance Bank has now been set up in which virtually anyone can open a bank account with as little as Rs. 5 min deposit.

ENTREPRENEURSHIP & YOU – The Nuts And Bolts

Focus Panel:

Rabia Garib, the editor of CIO Pakistan, introduces the panelists and asks them to say something about their line of business.

Entrepreneur Panel Discussion

Monis Rehman – Founder Naseeb Networks (Rozee.pk)

Ø Six years back returned to Pakistan from the US.

Ø Primarily involved in start-ups in the Valley during the dot-com boon.

Ø People predicted that I’ll pack my bags soon enough.

Ø Started www.rozee.pk.

Ø Engro gave a job ad in the newspaper for a staggering Rs.900,000.

Ø Engro gave an ad on Rozee for a mere Rs. 15,000.

ØEngro was able to hire 145 people solely through Rozee.pk.

Ø Cost of recruitment from rozee.pk = Rs. 4 per person.

Ø Cost of recruitment from the newspapers = Rs.900 per person.

Ø Pakistan ranks third in the world for having the fastest growth of internet users.

Rabia Gharib Editor CIO

Adil Ahmed – COO Symmetry

Ø Previously working for Yahoo in the Middle East.

Ø Came back to launch the first digital ad agency in Pakistan.

Rabia Gharib -Editor CIO

Dr. Zahir Syed – Co Chairman MIT Enterprise Forum of Pakistan

Ø Previously was the director of KIIT (Karachi Institute of Information Technology).

Ø MIT Enterprise Forum was formed in conjunction with MIT University USA.

Ø It was conceived to help the fledgling entreprenurs of Pakistan especially in the field of IT.

Ø 9 out of 10 start-ups fail, and to reduce that number, Tech Angels network is formed to provide support to start-ups.

Ø Business Acceleration Program is a Business Plan Competition started to bring out the entrepreneurial spirit of the youth.

Rabia Garib: Badar could you please explain how you fit into this panel of entrepreneurs, and how Google fits into all of this?

Entrepreneurship 09: Winning Strategies for Business Growth

Badar Khushnood – Country Consultant Google

There are three ways in which Google is contributing to entreprenurship in Pakistan.

1. Gmail providing the technical platform for entrepreneurial intiaitives like Rozee.pk.

2. Marketing – Google sponsored ads are a common feature of most IT start-ups.

3. Social entreprenurship – Google has empowered people irrespective of their age, gender, race or education to earn substantial sums of money if they have valuable content to contribute.

Saleem Qureshi – COO Higher Labs

Ø Higher Labs came to Pakistan instead of going to India or Egypt which were amongst the plans, just because of the plethora of talent available in this country.

Moderator Q: Why investment is needed for an IT start-up? Can’t it be started with zero investment?

Monis Rehman: There’s substantially less investment required than their brick-and-mortar counterpart but still needed.

Dr. Zahir Syed:

An entreprenurial eco-system comprising of universities, entrepreneurs and the government is needed to cultivate and sustain this culture.

Badar Khushnood:

Ø There will be some entrepreneurs who will come with initiatives to solve problems within this eco-system like mobile payment.

Ø Coming back to the question, it depends upon the type of entrepreneurship. Some entrepreneurial initiatives like blogging and consultancy work online can be launched with zero investment.

Ø There are quite a few people in Pakistan who haven’t invested a single penny and yet are earning thousands of dollars.

Moderator Q: How exactly do you earn money?

Adil Ahmed: By offering services to the clients and charging a percentage to them.

Adil Ahmed: I doubt the figure of 20 million internet users in Pakistan is bloated. There’s no authentic data to support this claim.

Monis Rehman: We’ve had 4.2 million distinct users on Rozee.pk as reported by Google Analytics, so at least this much user are online for sure.

Moderator Q: Why so many start-ups fail to make it?

Saleem Qureshi: This has got to do with the fact that it is inherently risky to start a business, any business. Coming up with an idea, we all come up with hundreds of ideas every day. Moving that idea into the development stage is tough. Moving from development to execution stage is tougher. Execution to implementation stage is excruciatingly difficult. And earning your first dollar as a profit is next to impossible. No wonder 9 out 10 start-ups fail to make it.

Audience Q: Since morning we have been discussing the glory of entrepreneurs in Pakistan or the family dynasties. Why aren’t we discussing the failures and how to avoid them?

I myself am a failed entrepreneur. I went into cattle farming and didn’t know the most important element of it was the vet. But getting access to a vet was extremely difficult and so decided to skip it entirely which cost me dearly. No one was there to guide me. Now I’m teaching entrepreneurship to students and whenever I ask them to come up with an idea for business, 90% of them want to open a food chain or do something related to IT.

Why don’t you discuss something that will really help those people wanting to go into entrepreneurship avoid failure?

Monis Rehman: Failure is good. We all fail and that counts as experience. I was fired from my first job as a waiter at a restaurant. My kid is just learning to walk. Everytime he falls, he learns how to better deal with gravity.

Badar Khushnood:

The thing is, those who want to do it will do it anyway even without a system in place or a proper support infrastructure. Most of the people present here especially on this panel did it without any of those things. So instead of waiting for a proper system to develop, do what you have to do.

There’s this young mother in Lahore with a one-year kid Maryam Nasim. She works just two hours at night designing greeting cards for 123greetings and bluemountain through online correspondence and earns $2,000 per month. She doesn’t even have a bank account and receives her money through Western Union. She also runs a site called www.pinkwool.com to showcase her work and promote her small consultancy business.

Then there are lots of bloggers who are earning substantial amounts of income, two of them Munir Usman and Salman are right here in the audience.

Monis was able to secure funding for his business at one of the lowest ebbs in the history of Pakistan.

Monis Rehman:

The story goes something like. A prominent hedge fund from the Valley was interested in investing in my business. I was delighted at this. Then it got ugly in Pakistan, what with the Constitution suspended and the leaders being assassinated. The firm got fidgety about the situation. Meanwhile I was able to some other prominent firms interested in us as well. At the end of the day we were able to secure the funding because it made business sense to invest in us. So make sure you’ve got a solid business model and don’t worry about the ground reality too much.

Rafiq Rangoonwala – CEO Cupola and President MAP

Rafiq Rangoonwala -CEO Cupola

What we have witnessed today shows beyond a shadow of a doubt that there’s hope for Pakistan. Pakistan is not a failed state and that if we work collectively we can convert our individual brilliances into prosperity for our country. Pakistan is not going to fade away. Let’s pray to Allah that He gives us the strength to make the dream of a great Pakistan come true.

THE VERDICT

Here’s my two cents worth:

It was an august occasion (no pun intended) and one of those rare occasions where some of the biggest movers and shakers of the Pakistani enterprises gathered in one place.

It was awe-inspiring how much the Memon community has accomplished and what giant leaders they have, but if that’s not what you came to hear, then you would be disappointed, as was evident from the remarkable decline in the strength of the audience by noon. It was a packed house in the morning. After lunch, approximately 45% of the people had left, as if lunch was their sole motivation for attending this conference. Two young professionals I met, Usman and Hussain, expressed their disappointment at the contents of the conference, saying this wasn’t what they had in mind when they signed for this conference. No doubt they had left well before the conclusion.

It wasn’t that the conference wasn’t good enough or anything. It’s just that the branding of the conference was all wrong, especially the title- Entrepreneurship ’09 : Winning Strategies for Business Growth, when instead it should have been called : ‘Role of Memon Community in Entrepreneurial Initiatives and Effects of Globalization’.

This has been a sad story of most seminars and conferences that are being held these days. In order to attract the largest possible audience, the organizers come up with snazzy terms that are in vogue. Unfortunately, what they don’t realize is that if the audience don’t get what they came for, they’re not going to return for any other conference by that same organizer, having lost the trust.

It’s one of the simplest laws of branding that you can’t be everything to all people. The shotgun approach just doesn’t work if you’re serious about building an enduring brand.

In the case of this conference, not even one speaker could give a single winning strategy for business growth. Of course they all talked about taking your brand global, but then most people already knew it without having to attend this conference. Then coming to the central theme – Entrepreneurship, even here not a single speaker could narrate his experience of how he went about building a great enterprise, what were the pitfalls he faced, how many times he failed and what exactly worked for him.

Instead of letting the speakers free rein to speak their mind, a standard framework should have been given to all to adhere to. It could have been something like this:

ü 5 Failures I had to face before reaching the Tipping Point

ü Time it took me from starting out to earning my first Rupee as profit.

ü Amount of money I started out with and from where and how did I raise the rest of it.

ü 5 pitfalls to avoid when starting out in this line of business.

ü What skills you need to succeed in this line of business.

ü 5 resources that you should turn to for help in this trade.

A framework such as this would have given the speakers a clear direction to follow and the best way to share their invaluable insights with the people who had turned up to learn from them. For example, it’s amazing what Razzak Dawood has done with Descon and it was only Salim Raza the governor of SBP who revealed this to the audience. Couldn’t Razzak Dawood himself shared how he made Descon a global force to reckon with?

The bottom line is that the Entrepreneurship ‘09 was good, it was well-managed (the lunch could have been a whole lot better especially the olive-and-fish dish) but it wasn’t what it was projected to be.

Related posts:

1. Entpreneurship ’09: Winning Strategies for Business Growth-1 Entpreneurship ’09: Winning Strategies for Business Growth was a conference...

THE HIGHLIGHTS

Entpreneurship ’09: Winning Strategies for Business Growth

Hanif Jhakura – CEO CDC

• Shaukat Tarin delayed and will now be appearing at the conclusion.
• It will be the first time he will be appearing as the finance minister.
• Cyril Nigel won’t be here either as her father is critically ill and she went back to be with him.
• Memon community has been at the forefront of entrepreneurship in Pakistan.
• Adamjees, Bawas, Bundukdas are some of the stalwarts.
• At the time of creation, the Memon community took the most entrepreneurial initiatives.
• Memon Professional Forum (MPF) started in 1985, grew from a handful of members to hundreds.
• MPF comprises of veteran entrepreneurs, professionals serving in major organizations as well as young professionals just starting out.
• Forum offers financial assistance to the deserving candidates of the community in addition to other philanthropic work.
• Entrepreneurship is the practice of starting new business from scratch. ‘It is the art of taking risks’.

Entpreneurship ’09: Winning Strategies for Business Growth

Ufone and other platinum sponsors of entrepreneurship 09

Razzak Dawood – Chairman Descon Engineering

• Who exactly are entrepreneurs?
• Are they just robber barons or do they fulfill a vital need of the society?
• No country values its entrepreneurs more than America does.
• Stanford University did a global research over a period of 10 years searching for the elusive factors that make entrepreneurs successful irrespective of their geographical position.
• What they discovered was contrary to what I’ve just told you about entrepreneurship – great idea propagated by a charismatic leader. Successful enterprises were in fact headed by ordinary people with little or no charisma but good people skills and humble beginning.
• Research has shown that in the long run, high profile charismatic leader is a liability.
• Other vital factors – a dream and a passion for what you’re creating, faith in Almighty and yourself and persistence.
o ‘If you can dream – and not make dreams your master;……’
o ‘If you can fill the unforgiving minute
o With sixty seconds’worth of distance run; – (‘If’ by Rudyard Kipling)
• I haven’t met a single entrepreneur who didn’t face hardships – cash flow problems, shrinking market etc.
• What’s your reason for being an entrepreneur?
• Is it to become wealthy, famous, enhance the reputation of your family or create an impact in the society?
• These questions are the essence of entrepreneurship. Think about them long and hard.
• It’s a long iterative process and there’s no right or wrong answer to it. What you feel at the bottom of your heart is your answer.

Entpreneurship ’09: Winning Strategies for Business Growth

• Do you want to be a clock-builder or time-teller?
• Clock-building is a painstaking long process – with inch-by-inch progress but the dividends are great.
• Pakistanis have the tendency to be in this business and that business. They feel they can make anything turn to gold with their touch. They lack consistency.
• Stay in your core competence. Only those companies become and remain successful which stick to their core competence.
• Problem with Pakistanis- they think the whole world is confined to Pakistan alone. Fail to see beyond.
• Being a Memon, I would like to say they’re hard-working and really competent at entrepreneurship.
• However, they have to think beyond exports and build institutions instead of just making money.
• There are hundreds of entrepreneurs around the world who made it but only a few who actually built institutions.

Syed Salim Raza – Governor State Bank of Pakistan

Salim Raza - SBP Governor on the right

• ‘What I’ve to say will appear mundane after the brilliant exposition by the Descon chairman.’
• Razzak talked about sixty seconds’ worth of distance run, would like to refer to another verse from the same couplet (IF by Rudyard Kipling):
o If you can make one heap of all your winnings
o And risk it on one turn of pitch-and-toss;
o And lose, and start again at your beginnings
o And never breathe a word about your loss;

• Dwelled at length about Pakistan’s poor ranking in various categories of Doing Business Survey 2009 conducted by the World Bank.
o Pakistan ranks 77th in ease of doing business.
o 101 out of 134 countries in credit ratings.
• 30 years ago a man who was already well-settled in his business came up with the idea of creating a company with engineering competence that could compete globally. Didn’t pay much heed to it especially since there were many technically superior companies in the global market. And yet this man persevered and made his mark on the global scene with his company. That man was Razzak Dawood and the company Descon.

Salim Raza- Governor SBP with MPF Members

• Irfan Mustafa – YUM! – Globalization and Its Implications

• Economic Tsunami – globalization.
• Five key enablers : concept of a company citizen as opposed to a country citizen, creating and leveraging skills, innovation and creativity, service-oriented culture.
• Pakistanis fragmented and divided – individually brilliant but put them together in a room for a few minutes and they’ll explode.
• Indians take any job, Pakistanis want ‘The’ job with a good title.
• Why Shezan, Quice and Salt n Pepper did not become global brands?
• Couldn’t BBQ Tonight create more than one branch in the entire city of Karachi or go to Lahore?
• Couldn’t Fareed multiply Agha Stores throughout the city? (If Agha closes its door, the elite of Clifton will die of starvation!)
• Now we have foreign brands like Makro, Metro and now Carrefour trying to cash in on the void which could have been filled by the local brands easily if only they tried.
• This is because we lack patience and do not like relinquishing control.
• Pakistani entrepreneurs have merely built mortars and bricks not institutions.
• Where are the Pakistani equivalents of Tatas, Mittals and Ambanis?
• Shops from G.T Road to Sialkot and Nishter Road in Karach are brilliant at creating copies of anything under the sun.
• Corporate America pumps billions of dollars into Research & Development.
• 200 universities in India have produced 5,000 Ph.Ds.
• India’s I.T industry revenue is equal to half of Pakistan’s GDP.
• Large chunk of money is funneled into creating television channels in Pakistan which do not create any real value.
• Ideas 2008 exhibition was all about Defence as will be Ideas 2009. Where is the Ideas exhibition for electronics, mechanics and so on?
• Pakistanis feel shame in showing hospitality in public.
• How many GMs have been produced by the hospitality industry?
• Why there is no MBA in hotel management in Pakistan?
• Restaurateurs are looked down upon.
• Only two prominent restaurateurs – Rafiq Rangoonwala and myself.
• How many Pakistani entrepreneurs built brands that lasted on the global scene? Descon is the exception.
• Who’s running Dubai? Lala’s from our neighboring country.
• World Quality Basmati Rice are imported by India from Pakistan and sold with Indian brand names in the Middle East market.
• Apart from the financial sector in which Pakistanis still hold sway in the Middle East market – 9 out of 10 people have accounts in UBL – Pakistanis have eroded their value in all other sectors.
• Life has dealt its hand- you have to face the challenge yourself – no Messiah will come, no apple will fall for another Newton.
• A nation of 170 million gifted souls.

Irfan Mustafa- Senior VP YUM Restaurants

Arif Habib – Investment Opportunities in Pakistan.

• Entrepreneurship is Ibadat, more nobel than charity because it provides earning opportunities to people.
• Sixth most populous country.
• Average devaluation of Pak Rupees in 10 years – 5%
• Average devaluation of Pak Rupees in 5 years – 7%
• Return on equity of foreign companies:
o Atlas Honda 38%
o Honda Car 23%

Arif Habib -Investment Opportunities in Pakistan

• Pakistan has the highest dividend yield in the region – 6.45%
• Real estate sector performance: 5 year average appreciation per annum-
 Commercial – 35% p.a
 Resident – 30% p.a
• Property tax on rental property reduced from 25% to 5%.
• 5% tax incentive for builders.
• Capital gain tax exemption if property sold to REIT.
• Yield per acre in Pakistan way less than the other countries including Egypt.
• Power:
o Current Capacity – 13.6 GW
o Demand – 16.5GW
• Demand to grow CAGR 7.8% for five years.
• By 2016 demand would have ballooned to 28GW.
• Fertlizer – Export Potential – Existing Markets – 10 million tons including Middle East and South Asia.
• Textile – biggest manufacturing sector of Pakistan
o 6USD Billion in about five years
• Finance – privatized in 1989.
• Wages in finance sector in Pakistan 2nd lowest in the region at 35 cents, India 47.3 cents, China 69.5 cents, Sri Lanka 44 cents and Bangladesh lowest at 27 cents.
• Office rent in India is highest in the region at $100 per sq.ft.
• Pakistan thus economically viable for setting up business.

Family Enterprises – Third Generation and Beyond – Panel Discussion

Family Enterprises–Third Generation and Beyond–Panel Discussion

• Only 15% of family owned enterprises continue to succeed to the third generation.
• 85% disintegrate before the 3rd generation takes to the reins.
• This was the result of a survey conducted by the consultant Mckinsey.

Ibrahim Qassim – Chairman Shield Corporation

• Share of all the family member should be equitable – not equal to ward off disputes.
• Family enterprises should build the business as institutions not family-owned business that dies with the family or the head of the family.
• Unity in family should be ensured.
• Brand-building ought to be a regular and ongoing pursuit.
• An incompetent manager belonging to the family should not be preferred over competent non-family manager.

Moin F Fudda – Country Director Centre for International Private Enterprise:

• U.N Entrepreneur Award once went to an illiterate 50-year old Pakistani woman.
• She sold two baskets of eggs every day to make a living. Then she took Rs. 15,000 loan and bought bicycles which she asked her alcoholic husband to give on rent. She invested the rent in installing baskets on the bicycles, gave half an hour extra to her tenants in return for carrying her eggs to the market. This way she was able to increase her sales from two baskets per day to an average of eight baskets. In this way she went on expanding her business.

Ali Jehangir- Director JS Group:

• When I went to Hong Kong for my first job, the cab driver I hired to take from the airport to the city kept shooting questions at me. He wanted me to rent an apartment from him. When asked why me, he said you’ll be pay on time because you were a banker.
• Business education passed down from father to son and so on is a tradition in Pakistan.
• On a trip to Pepsi factory as a schoolboy, one striking observation was that the children who belonged to a business dynasty had a remarkable idea intuitively about the layout of the factory and what different processes were being run there as opposed to children from working class families.
• This is an inherent advantage that offspring of business tycoons have and it cannot be acquired any other way.

Miftah Ismail – CEO Candyland

• Pakistan’s history is awash with dynasties in all arenas. In politics we have the Bhuttos, the Sharifs and the Legharis. In sports we have the Khans and so on.
• Ours is a relationship-based society instead of a rule-based society. Most of the major business decisions are based on relationships.
• The fact that we have so many family-owned enterprises in Pakistan shows there’s a need for them. In some way they are filling a void.
• Moral Hazard – The manager does not put in as much effort as the owner would because he’s not been given an equitable share of the fruits of his labor.
• Pakistani enterprises tend to shy away from sharing ownership of the business with their employees like offering them stock options.

Mahwish Tapal – Fourth Generation Tapal

arif habib and mehwish tapal

• Misconceptions abound about the leadership in the family-owned enterprises.
• Pressure on her being a fourth generation to emulate the stellar performance of the previous generations.

Moderator Q: How do family-owned enterprises deal with the issue of involvement of family members in the business?

Miftah Ismail: They don’t. All family member have to be accomodated into the business one way or the other. Most of them are inducted as heads of departments and sometimes they are not the best capable people for that job. I myself was straight away given the entire charge of the marketing department and took a while getting the grips of it.
Businesses that recruit family members at key positions without merit can’t compete with the like of MNCs or even local capable companies because they’ve got the capable people at the right positions.

Ali Jehangir: There’s a sense of entitlement inculcated into the offspring right from the outset by the mother that when you grow up you have to go work at your dad’s place.

Moin Fudda: Arif Habib was observed once to have made five decisions just like that in half an hour. He was able to do that because of the wisdom he has acquired over all these years.

Moderator Q: Can unresolved conflict lead to disintegration of the enterprise?

Ibrahim Qassim: Yes, it can. That’s why any conflict should be nipped in the bud. Problems never go away with time.

Ibrahim Qasim - Entrepreneurship 09

Moderator Q: How do comparisons between different family members affect the unity of the enterprise?

Mahwish Tapal: My father didn’t have any brother, so my mother didn’t get to compare her assets with that of her counterparts, so no chance of a conflict arose.

• On my very first day, my dad said that I hate the word ‘Seth’. You’re going to start at the bottom of the ladder just like everyone else and build your reputation from there.
• My father hired a lot of young graduates at the outset to help him along and imparted his skill and knowledge to them. People told him to refrain from doing so because these same people will become his competition in the future.
• He didn’t listen to these people and treated these young employees as his companions. Today they are still with Tapal, having gone on to become heads of their departments.

arif habib, ali jehangir & mehwish tapal

Audience Q: How do business families save their members from getting corrupted by the wealth?

Ali Jehangir: Different families come up with different solutions to this problem. There’s this famous Swedish family which has restricted access to the dividends of the stocks owned by the offspring. Although the offspring have ownership of the stock, it’s extremely difficult for the m to even sell any of their stock.

Miftah Ismail: One way to go about it is to create small businesses and give them to the nieces and nephews to run instead of taking them on board the core business. It would also test their entrepreneurial skills without hurting the cash cow.

Audience Q: Being a woman and on top of that the daughter of the owner, how do you deal with man who’re working under you? Are they resentful of you? Do they think you’re just their because of your dad and not deserving of the position you have in the organization?

Mahwish Tapal: I’ve been working for three years now, and initially it was quite difficult for me to justify my position. For the first two years I had to really work hard to building my reputation as a separate individual who has her own capabilities and that when she voices her opinion, it has to be taken in that context and not in the context of she’s the boss’ daughter.

*********************END OF FIRST SESSION**************************

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