NEERAJ BANSAL- PARTNER & COO- INDIA GLOBAL KPMG INDIA AND DHAVAL AJMERA – DIRECTOR, AJMERA REALTY & INFRA LTD IN A CANDID CONVERSATION DISCUSSED THE BUSINESS OF REAL ESTATE AND STRIKING A BALANCE AMONG GENERATIONS IN A FAMILY BUSINESS.
Dhaval Ajmera kick started the conversation with his observation that real-estate was no longer a 20 or 20 year cycle industry. He said, “Real estate is evolving y-o-y. Every 5 years you see changes within the entrepreneurs and the market itself. Our family has been in the real estate business for the last 53 years. I am the second generation developer and today we are three generations working together. What makes it work is - first generation’s experience, second generation’s execution skills and third generation’s novel ideas. The chances of mistakes get minimized. That’s the advantage of having 2-3 generations working together.”
Neeraj Bansal pointed out the need of professional management in a family run business. “If an organization would like to go for expansion and further growth, it would need futuristic thoughts as well as a certain amount of governance to come in. There will have to be extra bandwidth for strong integration of professional management within the organization.”
Dhaval Ajmera sharing his own organization’s example stated, “We began as a single ownership business 53 years back started by my late uncle who later brought in his brothers and then their children joined the company, thereby evolving to a family business. It indeed comes with its own pros and cons but, eventually we have evolved from a family –run business to a professionally -run business. How much ever important is family members being part of the organization, equally important is professionalism. When we moved from privately held business to a publicly listed company, it became even more important to have a mix of professionals and family members working together. So, the leadership remains the family and down the line professionally qualified management team takes over the execution.”
CHANGING TIMES & TRANSFORMATIONS
Neeraj Bansal concurred, “Blending the requirements of the company so that the white spaces within the leadership can be covered is important. The openness to accept the change has to come from within the organization.”
Dhaval Ajmera added, - Every generation has its own set of challenges. When the first generation bought lands they knew there would be problems during the land acquisition, approvals and funding. When we came into picture, we aimed at acquiring lands that had least associated problems. The next generation will probably not want to deal at all with any hassle and only go for land acquisitions that are 100% clear."
Neeraj Bansal agreed, Things have changed drastically in the last 7-10 years, where we have seen pan-India models coming up, more integration of the needs and aspirations among the customers and the style of operation is reflective of this new environment. The new generation entrepreneurs bring in a lot of fresh energy, technology, transparency and are open to new ideas from professionals from other segments, industries and sectors.”
“THE EARLIER GENERATION OPERATED UNDER A HEAVILY REGULATED ENVIRONMENT AND THERE WAS A LACK OF INFORMATION AMONG THE CONSUMERS. THIS HAS CHANGED FOR THE NEW GENERATION OF DEVELOPERS. THEY ARE WORKING IN A MUCH MORE TRANSPARENT REGULATORY SYSTEM AND EVEN THE CUSTOMER IS WELL INFORMED.” NEERAJ BANSAL
“A FAMILY BUSINESS IS CONFINED TO ITS OWN BUSINESS AND WORKING STYLE. THE PROFESSIONAL CXOS ARE EXPOSED TO WORKING IN DIFFERENT ENVIRONMENTS AND MARKETS. WHILE THE FAMILY LEADERSHIP ENABLES THE CONTINUATION OF THE ETHOS OF THE COMPANY, THE PROFESSIONAL MANAGEMENT CAN BRING IN BEST PRACTICES AND EXPERIENCES FROM OTHER SEGMENTS.” DHAVAL AJMERA
“DIVERSIFY IN TERMS OF GEOGRAPHY AND ASSET CLASSES. SCALING UP IS VERY CRITICAL AND CUSTOMER CENTRICITY IS NECESSARY. TRUST COMES WITH CONSISTENCY. COMPANIES WHICH ARE TRUSTED TEND TO GAIN AND HAVE PREMIUM OVER OTHERS.” NEERAJ BANSAL
“TAKE RISKS BUT DO NOT BE GREEDY. DON’T DO BUSINESS WHICH WILL INVOLVE RISKS IN TERMS OF OVER LEVERAGING, OVER TRADING. REAL-ESTATE IS NOW GOING TO BE VERY COMPETITIVE, TRANSPARENT, AND COMPLIANT. SO, BE COMPETITIVE AND ABSOLUTELY COMPLIANT. KNOW THE MARKET WELL AND DO YOUR BUSINESS.” DHAVAL AJMERA
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