Sanjay Manchanda: Building the future, brick by brick

An acknowledged trouble-shooter, Sanjay Manchanda firmly believes every problem has a solution.

He is the man behind the turnaround of Nakheel, Dubai's real estate bellwether, during the height of the property sector slowdown.

Sanjay Manchanda, the CEO of Nakheel, comes across as a strictly no-nonsense executive. A trait that must have come in handy during the endless deliberations and number-crunching sessions with banks and creditors while negotiating the terms and conditions of the developer's multi-billion-dollar debt restructuring.

Assuming the role of financial officer and later CEO with Nakheel, Manchanda was given a brief remit by chairman Ali Rashid Lootah: clean up the balance sheet and produce results. Using every bit of his 25-year experience at PricewaterhouseCoopers (PwC), he got cracking with his team of financial, legal and business advisors.

An acknowledged trouble-shooter, the CEO firmly believes every problem has a solution. "Most complex problems can be broken down into simple modules. You must first make a list of priorities," Manchanda told the audience at the Khaleej Times 'Meet the CEO' session at the head office of the daily.

Manchanda gave a brief glimpse of the challenges he faced during his corporate journey and how he and his team not just survived the exacting times, but also used that time to build a solid foundation for a profitable future.

How big was the problem
Offering an insight into the magnitude of the problems at Nakheel, he recalled: "During its prime, Nakheel had 4,000 staff members. Overnight, 3,000 left. There were no handovers and no notes exchanged. No one know where the financial documents were."

When asked what egged him on, he said it was the fear of failure that was one of his primary motivators. He knew he could not afford to fail since his personal reputation and integrity were on the line.

The executives in charge of the financial restructuring learnt a few hard lessons: the business was too fragmented and each project was being undertaken as a separate company. "There was no backbone to the business and no shared services running through, capturing all the essential data. We needed to make sure that our data points, templates and processes were consistently followed across the business," says Manchanda.

There was also the Herculean task of bringing around the disgruntled creditors and convincing them to restructure debt worth $16 billion. Citing one of his first meetings with 31 bankers, Manchanda remembers walking into a hostile environment, where he was asked to produce Nakheel's audited accounts for a particular year.

"Are you genuinely interested in our financial documents?" asked Manchanda. "You only want to know where the money is going to come from, how it will be utilised and if you will be paid. Give me two years." The rest, as they say, is history.

Resistance from within
Coming in as a consultant, he also faced pockets of resistance from within the company. He used both patience and pedantic to deal with challenges at the workplace. "I am a kind of guy who walks up to the junior-most staff and asks them to quell my doubts. People appreciate that someone higher up in the hierarchy does not hesitate to ask them for their knowledge. When you speak, you only speak what you know. But when you listen, you know a lot more," he said.

Besides his support team, Nakheel's chairman and board of directors were a big source of strength and worked in tandem to tackle challenges head on, he says.

"There is no shortcut to hard work. We have to embrace challenges. The approach varies from person to person. You can draw from your personal experiences," the CEO said while sharing the secret of his success.

Manchanda and his core team put in place corporate governance and financial discipline - processes essential for a financial turnaround.

He also faced the challenge of motivating the thousands who remained with Nakheel. "They saw a ray of hope in the manner in which the task was being undertaken," said Manchanda.

He remembers the brainstorming sessions with his data planning and financial strategy team. "I told them there was no easy way out and we have to fish for information. Let's take a resolve that we will start working collectively, bit by bit. If it means we have to recreate from scratch, so be it. Today, I can tell you which budget number we have missed by how much and why."

If that doesn't resonate absolute confidence and conviction in his team, what does?

Wider challenges
However, with property development being a cyclical business, other challenges manifested in various forms. "We can do whatever we want to, with all our might and tools we have, but you cannot time the market. How can one know in advance how Brexit and Trumponomics will affect investor psyche? Technology is also rendering the historic way of doing things and handling businesses obsolete," explained Manchanda.

To a question on Nakheel's future, he responded: "I don't think anybody can predict where we would be 10 or even three years from now; the world is changing so fast. We have to be very circumspect about the changing environment around us and respond very quickly or we risk being left behind."

Nakheel has also tweaked its business strategy and added more verticals such as retail, hospitality and residential leasing to its portfolio. This was to hedge against fluctuations in property development and to add more income-generating businesses.

"We are the second largest residential leasing company in Dubai behind Al Wasl and have around 17,000 residential units under lease," informed the CEO. The developer currently operates 4.5 million sq ft leasable area in retail and aims to quadruple that figure in the next three to five years. Nakheel is already active in the hospitality market with an Ibis Styles near Dragon Mart and Premier Inn on Sheikh Zayed Road. Besides tapping the mid-market hotel space, Nakheel also has tie-ups with new brands which will bring in four-star properties to Dubai.

Nakheel is one of the oldest and biggest property developers in Dubai. However, a lot of smaller developers have now entered the fray. Reacting to competition, Manchanda said: "We don't want to be in the rat race. We are confident of what we can sell and to who we can sell. The level of confidence the consumer base has in Nakheel is different from what they have in other developers. There are products that suit different sections of the society and economic pockets. There is room for everyone."

On how he has limited himself to two companies throughout the span of his long career, Manchanda said promotions kept coming his way at PwC. "I was fortunate to keep getting my career moves. There was a point when I thought I would never make it to the zenith of my career in professional accountancy. It took a long time coming, but I finally made it. When you reach the top, you start enjoying your success. I always wanted to be seen in the light of success."

- deepthi@khaleejimes.com

Deepthi Nair

deepthi@khaleejtimes.com