A time of transition is always difficult. But Punit Goenka has managed successfully because he looks upon his father — who founded Indian media and entertainment company, Zee Entertainment, of which Goenka is now CEO — as his guru. He will be successful, he says, the day his father thinks he is successful.
Goenka spoke at the recent Wharton India Economic Forum (WIEF) in Philadelphia. In this interview with Knowledge@Wharton, he discusses his global plans, leadership style and the digital imperative in media and entertainment.
An edited transcript of the conversation follows.
Knowledge@Wharton: When did you take over from your father, Subhash Chandra, as CEO of Zee Entertainment? What were the early days like? What leadership skills did you need at that time and how do those compare to the skills you need to lead Zee Entertainment today?
Punit Goenka: I took over from him as CEO in 2008 and then, finally, got the managing directorship as well in 2009. I think the early period was for transitioning from how my father ran the business to trying to get a more collaborative approach in the organization rather than a top-down approach that the first generation entrepreneur tends to drive. Today, he is the visionary for the company and I am the implementer. So they kind of complement each other. He creates the vision for the organization and for the group. He has CEOs and directors like me who go out and make his vision a reality.
Knowledge@Wharton: How does the division of labor work between your father and yourself?
Goenka: Luckily, he is not involved in the day-to-day business any longer. He reviews the business on a monthly or quarterly basis and as he deems necessary, of course. The reports go to him on a monthly basis. But, generally, his reviews are on a quarterly basis. We have an annual vision conference with him and the senior management of the company where he sets the next five years’ agenda for us. On the basis of that, we report back to him every year.
Knowledge@Wharton: It was interesting to hear your presentation about the media & entertainment (M&E) industry and how it is working in India. How would you say the growth of India’s M&E industry compares with the industry’s growth globally? Where do you see the biggest opportunities?
Goenka: The biggest opportunities are in the distribution sector where India is moving from an analog market to a digital television market. In the past four years, we have digitized more than 70 million homes in the country and the agenda set by the government is that by December 2016 the entire country should be digital. That is another 90 million homes. In an analog environment, bandwidths are restricted to 40 to 60 channels. The opportunity for creating a lot more content is far greater in a digital environment. That also delivers great choice for the consumer.
Other than this, the Internet represents a huge opportunity in our country. With the technology advance that we are seeing — whether it be 3G or 4G — I think the consumption of good quality content is only going to grow.
Knowledge@Wharton: The flip side of opportunity is always risk. Where do you see the biggest risks and how can those be overcome?
Goenka: The biggest risk is that you do not adapt to technology changes, you do not get your content ready to be served on all potential future platforms. If you adapt, you can overcome the risks easily. For example, our company is investing heavily in getting ready for the digital world by creating more content or modifying our content.
Going forward, the Indian Diaspora has to be considered a different group. Content will have to be on the basis of the current context of what they are used to consuming.
Knowledge@Wharton: Last May there was a change in the political environment in India with the Modi administration taking power. In the period since then, have you found that the ease of doing business has improved in India or are things still the same?
Goenka: Things are definitely improving. The speed of getting things done in the government environment is improving significantly. We have to push far less paper now than in the past. There is still a long way to go for it to become a seamless kind of regulatory model. But all the signs are favorable and heading in that direction.
Knowledge@Wharton: You said in your speech at the forum that the Make in India approach may have slowed certain things down. Could you explain that a little bit?
Goenka: India does not have a large manufacturing base for set-top boxes needed for digitization; they are imported from the Chinas and Koreas of the world. Once you adopt Make in India as your strategy, there is a delay in implementation of digitization.
Knowledge@Wharton: Since we are speaking of digital media, I saw that on February 18, Mashable announced that it was going to be entering India in collaboration with India.com, which is a Zee property. Could you tell us about your objectives for that deal and what you expect to achieve?
Goenka: As I mentioned, we are getting ourselves ready for the digital world. The Internet is going to be one of the big areas. India.com is a business we had started over four years back and it has become the No. 3 portal in the country already with more than 11 million unique users as per the last count I saw. We came to the conclusion that to build a portal is not possible for us because collaboration is the order of the day and there are people out there that run businesses that are best in class in their categories.
Mashable was one alliance that we wanted to do. We knew they were moving into the country. We approached them. They were quite happy with the progress we had made in the short span of time. And, therefore, it was a win-win situation. I am quite hopeful that we will take that business to a new height along with this new alliance as well.
Knowledge@Wharton: You have been expanding your global operations, but a lot of your current programming serves the Indian Diaspora. You have said in the past that the third and fourth generation of the Diaspora does not connect to content produced in India. Given that reality, could you explain how you see the roll-out of your global content strategy?
Goenka: Going forward, the Indian Diaspora has to be considered a different group. Content will have to be [produced] on the basis of the current context of what they are used to consuming for entertainment and not our current way of making soaps and dramas. There may be content that is co-created in the West. Going beyond the Indian Diaspora, one would like to start customizing the content to suit the needs of each market. For example, our Arabic channels are customized for that market. We are doing the same thing in Russia and some countries in Asia. We have plans for Africa that we want to implement in a big way. We also want to soon come to this part of the world — the U.S. and maybe Latin America.
The biggest risk is that you do not adapt to technology changes, you do not get your content ready to be served on all potential future platforms.
Knowledge@Wharton: Based on what you just said, what is the proportion of global content to India-based content at the moment? And how do you see the proportions changing over time?
Goenka: I think the proportion today is minuscule. I won’t even give you a percentage because it will look so small that it is ridiculous. But going forward I think it will start to expand in a bigger way. We have to keep in mind that the youth is the fastest-growing audience in India and the world. Twitter The proportion will move significantly in their favor in the future. Youth is also the most fickle-minded and very hard to keep in front of the television. Content has therefore to be created in a manner that it can be consumed on the go on any device that they want to consume it in and at the time that is convenient for them. All those factors have to be kept in mind as we create content for the new generation and we are working towards that.
Knowledge@Wharton: You launched a wellness chain called Veria some time ago. How is that doing?
Goenka: That is doing well. We re-branded that recently to Zee Living and it has now gone to almost 30 million households. We have successfully launched that business in the Middle East and are now entering the Asian market. So it is on track.
Knowledge@Wharton: I have a question that relates to family enterprises. Your father has stated that the group is like a perforated piece of paper. Any brother or cousin or uncle is free to walk away with his part. Do you expect this to happen? What are the synergies in staying together?
Goenka: I think there are a lot of synergies in staying together. While we try to bring efficiencies within our own individual businesses, staying together has helped us bring synergy and learning from across each other’s business as well. It has worked for us. The other good part is that once one is clear what belongs to each one, the family comes a lot closer because we are no longer treading on each other’s toes. The economic interest of his business is no longer linked to my economic interest in my business. I am, therefore, free to work on my destiny and yet bring in synergies from others. I think it has brought the family a lot closer and helped us grow as a family as well as a business family.
Knowledge@Wharton: I read a report some time ago that Zee had overtaken Bennett Coleman & Company (The Times of India Group) as the largest media company in India. Is that still the case? Because Times of India is a privately-held company, it is hard to compare.
Goenka: It is very difficult to compare. While I do not have the numbers, I think they are ahead of us. But we are No. 2, and our endeavor is to be at No. 1 very soon in India and other markets.
Knowledge@Wharton: Who is doing better on margins?
Goenka: I do not know the numbers. But I can confidently say it is Zee.
Knowledge@Wharton: In television, which is your mainstay, could you tell us a little about your most successful programs? In how many languages do you telecast? What are your growth plans for the Indian market?
Goenka: Currently in India we are broadcasting in nine languages, including Hindi and English. Our plans are to get into three additional languages in the near future. We will expand not just in the entertainment field, but in the sub-genres as well — films, music, kids programs, etc. We have significant plans going forward in India as well as in global markets.
Knowledge@Wharton: What is your competitive strategy with relation to Star TV?
The value of your word is stronger than the written word. That has always helped me in business.
Goenka: The mantra we live by is: Do what you believe is right rather than look at what competition is doing. We set our own chart and follow that. We believe that it will deliver for us better than looking at what my competitor is doing, whether it be Star or it be anyone else.
Knowledge@Wharton: One aspect of your media operations is, of course, print publishing with DNA. There are reports that it is not doing well financially. You are a big believer in operating businesses that return a decent profit. What is the future for DNA?
Goenka: In my view, the future for the print industry overall is bleak. I think the print category will shift online very soon. DNA will have to find its own space within the digital environment and move away from the traditional way of printing newspapers.
Knowledge@Wharton: Do you think you may shut down DNA?
Goenka: Well, if it comes to that, yes. Why not? One does not have to be in love with this business. You have to at the end make money. Right? If it is going to lose money perpetually, what is the point of running it?
Knowledge@Wharton: Your father, Subhash Chandra, is a strong personality and a successful entrepreneur. What are the most important leadership lessons you learned from him and how does your leadership style differ from his?
Goenka: I think one of the key things that I learned from him and something that has helped me a lot is: Be extremely honest with yourself. Second, the value of your word is stronger than the written word. That has always helped me in business. In terms of differences, he has a directive style of running the business. I have a more collaborative style. So they both complement each other.
Knowledge@Wharton: If you were to think back on your career in business, what would you say is the biggest leadership challenge you have ever faced? How did you overcome it? And what did you learn from it?
Goenka: I have a finance background; I was trained by the family accountants, not through formal education. My biggest challenge was making the shift from being a manager or an owner of the business to running a creative content business. This was especially so given the fact that I manage a team of more than 800 creative people. It was the biggest challenge to earn their respect, to show them that the creative business is something that I understand and can add value to. I think I did that successfully over a period of time. And, therefore, I made my mark in my business and in the industry.
Knowledge@Wharton: Just a couple more questions. You once said that what you really want is for people to see Subhash Chandra and say, “That is Punit Goenka’s father. That is my only goal in life.” Have you achieved that goal?
Goenka: No. Far from it. I think I have a long way to go still.
Knowledge@Wharton: One last question. How do you define success?
Goenka: Success is defined, in my view, in the way people see you or project your image. For me it is the way my father would see me. He is my guru. He is the person from whom I have learned everything. So when he believes I am successful – whether I am actually successful or not – I will say I am successful. I think I am far from it. I have not yet even reached the tip of the iceberg.
This content originally appeared on Knowledge@Wharton's website.