INTEGRATE & SUCCESSFULLY CONTROL YOUR VALUE CHAIN: SOBHA’S SECRET TO QUALITY
The Lessons beyond Real Estate:
• Successful integration depends on a carefully crafted
model that considers long-term market needs and provides flexible ways of meeting them.
• Integration requires long-term commitment and willingness to subsidize inefficiencies of smaller companies
within a group.
4. HAVE THE RIGHT MANAGEMENT IN PLACE.
“We have been able to institutionalize the integrated process
within Sobha, so we can remain ahead in the future. For
this, we bring the best talent from all over the world to our
companies with people coming from Australia, Germany,
Italy, Singapore,” Ravi Menon, Chairman, Sobha India.
“With a significant proportion of our employees being under
the age of 40, there is a tremendous opportunity for young
talent to be groomed into future leaders. These are the
individuals who carry forward our obsession with quality,
and who ultimately help shape the future direction of Sobha’s
growth,” says Raj Chinai.
Importantly, for corporations across industries, management
responsibilities must be clearly defined to avoid misunder‑
standing. For instance, the requirements and responsibilities
within Sobha’s furniture company are vastly different to those
of the group’s construction business. However, while respon‑
sibilities may differ, it is also vital that management teams are
united by a common vision and shared goals if they are to col‑
laborate on projects effectively.
In Sobha’s case, established leadership in its more mature
companies leads to minimal reporting requirements and macrolevel coordination, while in its newer and smaller companies,
key executives provide the necessary support and management
until the right team is established. As Sobha’s companies evolve,
additional leadership responsibilities are introduced.
The Lessons Beyond Real Estate:
• Placing the right leader at the helm of each business unit
is essential, not just to the success of a single subsidiary,
but to that of the entire corporation.
• Defining management responsibilities to reflect the
varying needs of each unit is important, but so too is
ensuring that they are united by a common vision.
5. EMPOWER YOUR PEOPLE.
“Human beings are comparable to batteries: you have to
charge them. Training has to charge all employees of the
company, not only the top managers.”
“I tell my people: there is always a challenge, always look for
that challenge. In Sobha there is so much learning happening
on a daily basis,” says PNC Menon.
Identifying the right employees is integral to maintaining
a culture that focuses on exceptional quality. Yet, achieving
this is the group’s most significant long-term challenge.
Developing a team of skilled employees that innovates and
strives to improve business practices is a goal that has to be
continuously pursued.
56 Emerging Markets Business Summer 2016 • Issue No. 1
First, regardless of management processes, efficiency gains
rely on selecting and empowering the right employees.
Even in the case of the famed Toyota Production System—a
framework designed to conserve resources by eliminating
waste—the Japanese automaker reached the conclusion that
reducing employees did not necessarily result in improved
efficiencies. On the contrary, empowering employees made
for a stronger production system.
In addition to empowering existing employees, companies
should engage with universities and technical centers that
open pathways to skilled employees and encourage the growth
of talent. Training employees through regular programs is
also an important step. These programs must address every
employee, from the foremen to top management—a practice
that Sobha has carried out for a quarter-century.
The Lessons beyond Real Estate:
• Constant training across the pyramid of the organization
keeps staff at the forefront of their disciplines and energized
with the new ideas and tools required for success.
• Efficiency gains do not rely on the development of new
systems, but on selecting and empowering the right people.
6. UNDERSTAND YOUR MARKETS.
“The number one factor we compete on is location. Then it’s
quality. We are fortunate to have acquired land parcels in
extremely desirable locations. Our next step is to design and
develop products that justify the value of those locations,”
says Siddharth Vaikunta.
“In India, the greatest challenge developers are facing is
that customers demand everything,” says JC Sharma, Vice
Chairman and Managing Director, Sobha India.
The first step in understanding a given market is to identify
the core project drivers and value levers. From there, the
priority is to secure the best possible location. For Sobha, a
truly significant location allows the developer to introduce
exceptional products that justify the value placed on the site.
In turn, maximizing the value of any given location depends on
a variety of parameters. Instead of offering a single product,
such as office space or housing, Sobha develops mixed-use
projects and diversifies its offerings, placing equal importance
on design, programming and branding. By understanding, and
in many cases forecasting the market, it introduces additional
products that attract a wider spectrum of customers.
Excellent design is especially important in parts of the world
where social interaction happens primarily indoors, and
where people want to own products that offer a high standard
of comfort to their guests. In this regard, Indian and Middle
Eastern customers can be demanding, with requests ranging
from additional parking spaces, to landscaped areas within
buildings. To meet these demands, the industry is expanding to
cater to cultural and traditional needs and growing expectations.
The Lessons Beyond Real Estate:
• Integration will fail if a group’s combined entities do not
understand and meet the market needs.
• Location is key. Understanding the market enables you to
identify the best possible place to do business, whatever
the industry.