30 Minute Interview

'Change of Management Has Been Contemplated for Quite Some Time'

After seven years, R Basil, CEO and MD of Manipal Hospitals, is stepping down from the group. This has created quite a flutter in the industry. In Basil's absence, a management committee has been constituted to decide on key matters related to the hospital business. Dr Ranjan Pai, CEO, Manipal Education and Medical Group (MEMG), tells Rita Dutta about his strategies to deal with the present situation and his vision for the group. Excerpts:

In the present crisis, it is believed that you have formed a board with some key members and you as the chairman. Will the board function till the time the new CEO is announced? Was Basil's leaving inevitable?

At the outset, I would like to correct a misconception- there is no crisis. The change that has happened is part of a natural progression of change management which has been contemplated for quite some time, taking into account the requirements of the challenges envisaged over the next three to four years.

We have initiated action to identify a suitable candidate. In the interim, yes, we have formed a 'management committee' comprising key people within the health system and from within the group, whose mandate is to facilitate the routine functioning of the company and to ensure a smooth transition once a new CEO has been identified.

When do you plan to announce the name of the new CEO? In another interview, you have mentioned that you are in no hurry to choose as R Basil is there for three months. But with him not coming to office and decisions taken by a board, surely there is an urgency. Please comment.

As mentioned earlier, there is no urgency. Our view is that it is important for an organisation to have a clearly defined leadership structure. The immediate near term and future challenges need to be handled with a clear focus. Hence the formation of the management committee. I would also like to point out that R Basil has offered his services for three months as and when required. You would certainly hear the announcement of the new leader very soon.

Will the new CEO be chosen from outside or inside the organisation?

As mentioned, it is important for us to identify the right candidate with the right aptitude to handle the challenges. We believe in the best fit and we will examine options within the system as well as from outside the system.

What are the qualities that are a must for the new CEO?

Someone who can execute well, build a great team and is of the highest integrity.

Would you be more hands-on now than ever before?

As the representative of the principal shareholder, I have a responsibility that the performance of the hospitals benefits the patients, our eminent consultants, the patients and the employees associated with the hospitals as also the other shareholders. I have a very able senior management team to shoulder the responsibilities and my role is to provide the necessary supportive guidance. I believe and have practiced delegation to my senior colleagues.

The focus of the group has been mainly on the flagship hospital in Bangaluru. Other units like Vijaywada, Salem, Goa are not on par with the Bangaluru project and also never in the limelight. Is that a conscious strategy?

The board of the company and the management team have followed a twin track strategy of making sure that the flagship hospital in Bengaluru continues to excel even as enough attention is paid to the newly-acquired hospitals to ensure that the processes get stabilised and operations ramps up. Besides these hospitals have been with us for less than three years. It is our hope that over the next few years, the other hospitals will evolve into leadership positions in the communities that they serve.

Hospitals planned in Delhi, Kolkata and Mysore never took off. Will they ever come up in future?

Yes, the specific opportunities we had have been given up. These are business decisions taking into account the viability and value addition to the system. If similar opportunities come in future and are found attractive, we will definitely examine them seriously. The growth imperative is very much a part of our strategy.

Do you envisage the group as a South-based player or a national player?

We will tap whenever there is a good opportunity in the country. Obviously, targets in the south will be more attractive.

When other key players are charting out aggresive expansion plans at a pan India level, the growth of Manipal Hospitals has slowed down a bit in the last two years. What are the reasons for that? How are you planning to accelerate the growth?

We grew at a rapid pace between 2006 and 2007, when we started and acquired five hospitals. Over the last two years, we have been focussed on stabilising these hospitals. Now that they are stabilising, we will again start looking at expanding.

We have seen some renowned doctors like Dr Jaya Bhat, Dr MG Bhatt, Dr Venkat Raman and Dr Hedge leaving the group. Do you think the group is unable to keep up with the ways of star doctors? Does not their leaving impact the bottom line?

Doctors leaving one hospital and joining another is a normal feature in the industry. A strong brand and pull of the medical education affiliation have always enabled us to draw the best of breed. We continue to be a doctor-friendly hospital and the addition of new consultants is proof of that. The doctors you mentioned are good doctors and we wish them well and some of them still continue to practice here as visiting consultants.

It is said that cleansing of the system is in the pipeline. Is that true?

There is no such thing as cleansing the system. The hospital is doing very well and I don't think it needs any major cleansing. Our endeavour is to improve the system on an ongoing basis.

How are Manipal Care and Cure and Stempeutics faring?

I am happy to inform that Manipal Care and Cure has shown very positive trends over the last few months. The flagship centre in Bangaluru has broken even. Corporates have shown a very strong preference for undertaking health checks for their employees and it has a strong clientele. For Stempeutics, we are on track based on our expectations. As I am sure you will be aware, this is a long-term commitment made by us and we continue to make steady progress. This is a very exciting field and we have some bright scientists working here.

How do you see the group five years down the line?

As I had mentioned earlier, we see ourselves as a significant player with a fairly spread out foot print adding couple of hospitals to our portfolio each year. We would have a good basket of stable hospitals. Our guiding principle will continue to be to offer affordable healthcare of the highest quality to over an increasing geographical footprint.

rita.dutta@expressindia.com