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Cover Story
What makes a successful business leader?

INTERVIEWS

   Shaukat Mirza - Former Chief
    Executive, Engro Chemical
    Pakistan.
    Mian Mohammed Latif -
     Chief Executive, Chenab Group.
    Alireza - MD, Shabbir Tiles.
    Ahmed Dawood -
     Chairman Dawood Group.
    Fazle Hassan -
     Director,  (IBA) Karachi.
    Zubyr Soomro - President, 
     UBL.
    Masood Hashmi -
     Deputy Managing Director,
     Orient McCann-Erickson.

Vision of the CEO as the team leader, policies, management practices and government policies are the key factors

By SHABBIR H. KAZMI
Sep 13 - 19, 1999 

The companies operating in Pakistan can be divided into two distinct categories. One working exceptionally well and the other incurring huge losses regularly. The companies which have grown in size have been posting contrary results when compared with the other companies belonging to the same sector. While the working conditions and business environment are identical, the vision of management and policies to achieve these objectives appears to be the driving force.

Performance of a company is a direct reflection of effectiveness of management policies. This is dependent on a number of factors which include, the education and expertise of key personnel, support of the team members and successful interaction with policy makers. However, it is clear that it is the CEO who makes the difference. He, not only works to get his policies approved by the board of directors but also ensures implementation of agreed policies. The success largely depends on the attitude of all the employees. Because they, not only own the policies but also make efforts to achieve the desired objectives.

Financial results of a company reflect the way the management reacts to the changing circumstances. The ability to forecast the future, adapt new policies and influence government policies also play a vital role. The incentives provided by the government may help in improving the profitability of companies in short-term but the efforts to survive and make profit without these crutches provide the real strength.

Investment climate in Pakistan has remained conducive since the Independence. During the last 52 years new industries have been established, exports have grown and diversified. Not only local but foreign investors have enhanced their stake in the country. Though, it is often said that GoP policies have been changing, it is on record that none of the foreign investors has ever left the country. Even at the time of nationalization, foreign investment was not taken over by the government.

Contribution:

The other factor to be noted is that the foreign companies have grown in size by bringing new investment and ploughing back the profit earned from Pakistan. In a similar manner, local sponsors have also enhanced production capabilities, substituted imports, diversified their product range and exports. They have been paying good dividend to shareholders and making significant contribution to national exchequer.

Some of these examples representing foreign investment are, Engro Chemical Pakistan (previously Exxon Chemical Pakistan), ICI Pakistan, Abbott Laboratories, Glaxo, Pakistan Oil Fields and Pakistan Petroleum. Among the leading local sponsors are: Habibs, Dawoods, Adamjees, Saigols and Crescent Group, who are known as the old veterans, while the new entrants are Lakhanis, Manshas, Hashwanis and Chenab Group.

At the same time, it is also interesting to note that textile sector, despite enjoying the highest protection and low cost raw material for nearly half of the century has not been able to exploit the real potential. However, some of the companies belonging to textile sector have been doing exceptionally well while others continue to post dismal profit or huge losses. The review of textile sector alone shows that if Sapphire and Chenab Fabrics can grow in size, enter the export markets and establish their identity in the global markets, why others cannot do the same?

It is also true that some of the sectors were able to solicit better policies with the government but textile units enjoying all the conceivable protection and incentives failed to reap the results. Fertilizer (urea) and PSF sectors were given incentives and companies managed to substitute imports and bridging demand/supply gap through successive expansions. However, the level of protection and subsidies are on a decline. Companies belonging to these sectors are now in a position to live without these crutches. This is only due to their vision, policies and efforts to optimize cost of production.

Recognition of good performing companies is necessary. These companies are not only the role models for others but also a catalyst in bringing fresh investment, both local and foreign. Every year Karachi Stock Exchange gives awards to 25 top performing companies and Management Association of Pakistan gives Corporate Excellence Award. These Awards attract other companies to improve their performance.

In the following pages PAGE tries to find out the factors behind the success of some of the top business leaders. These persons, in their own right, are the role models for others. And others may also draw inspiration from them. Though, every business entity may not be able to create similar stories, but, there should be efforts to change the overall outlook.