That the House of Habib is one of the richest conglomerates in Pakistan is a well established fact (it contributes an estimated 1% of Pakistan’s total GDP, according to its management). That Indus Motors contributed a large chunk of that wealth, was also a well established fact.
But the Habib descendant who led Indus Motors, Ali Suleman Habib, needed to impress this fact upon his newly hired CEO, Parvez Ghias, in 2005. Habib had been the chairman of Indus Motors since its inception in 1993, and had already hired two CEOs since then. He had also served as CEO for a brief period between 2004 and 2005. Ghias, who Habib had successfully poached from Engro, would be his latest leader.
Around office premises, Habib was known to carry a pad and pencil at all times. It was to draw down ideas, scribble notes, and often show said scribblings to employees. So Habib pulled out his pad, and drew a pie chart for Ghias. The pie represented all of the Habib family wealth. 94% of that wealth, Habib told Ghias, came from automobiles, and (cue more scribbling) 90% came from Indus Motors.
It dawned upon Ghias what was happening. Habib was entrusting his entire family’s fortune in the hands of a total stranger. Yes, Ghias was a corporate type, a former CFO and vice president at Engro Corporation, and yes, he was more than competent to lead Indus Motors. But Habib was creating a culture of trust, one in which he was allowing others to take the lead. He would be a different kind of seth then, one who could see the potential of doing things in a new way, in a professional manner.
That is what makes Ali Suleman Habib’s life so special. Habib died on April 17 this year, in his hometown of Karachi. He was 63. But what makes him so missed, and so respected in the wider business community, is not just about what he achieved, but that he was brave enough to create space to allow others to also achieve their goals. This was a man who knew when to step back – and in doing so helped cement the status of the House of Habib in the 21st century.
House of Habib
Ali Suleman Habib spent most of his life in his home city of Karachi. In fact, the Habibs in some ways are the quintessential Karachi business family – that is, they can trace their history to the other side of the border. The House of Habib began in 1841, when Esmail Ali, who was from Gujarat in Western India, began the Khoja Mithabhai Nathoo Trading Company.
His son Habib Esmail joined the firm in 1891, and established Habib and Sons in 1922. This is when the famous Habib family logo was made, with a lion, the Lion of Ali and a sword, the sword of Ali, Zulfiqar, above it.
His son Mahomedali Habib is famous for two reasons – first, he and his brother Dawood Habib formed the Habib Bank in 1941, which is now Pakistan’s largest bank (and no longer in the control of the Habib family, due to Prime Minister Bhutto’s nationalization drive of the 1970s). Second, Mahomedali Habib moved the bank to Karachi on the founder of the country Muhammad Ali Jinnah’s request. It had previously been headquartered in Bombay. Famously, Mahomedali Habib even gave Muhammad Ali Jinnah a blank cheque for Pakistan.
In Pakistan, the family business was expanded on by first Mahomedali Habib, and then his sons Rafiq Habib, Suleman Habib, Haider Habib, and H.M. Habib. The global bank Habib AG Zurich, along with Thal Jute, were both started in the 1960s, while the Pakistan Papersack Division was started in the 1970s.
Ali Suleman Habib was one of the five children of Suleman Habib, and the nephew of Rafiq Habib, who is the only living son of that generation, and the de facto patriarch of the family. Ali Suleman Habib, his siblings and his cousins represented ‘G3’, or the third generation of Habibs in Pakistan.
Born in 1956, Habib’s primary education was not at other schools for sons of elite Pakistani families – say the Karachi Grammar School, or Aitchison in Lahore. Instead Habib was educated at the very school his own family had set up just a few years after his birth: the Habib Public School, in 1959.
The Habibs were unusual not just for sending Ali Suleman to Habib Public School. Habib was also part of the first generation to leave Pakistan for his higher education, receiving a bachelors of science in mechanical engineering from the University of Minnesota. He also completed the Program for Management Development at Harvard Business School in 1986.
Ali Suleman entered the family business at just the right time in the late 1980s, which were poised to be the years of the Habib family’s re-entry in the private sector. In particular, Pakistan’s auto industry was deregulated in the early 1990s after which major foreign automakers, through joint ventures with local partners, made investments in Pakistan.
Among themselves, the Habibs are a relatively egalitarian bunch. Different branches of the family are given different aspects of the business to take over. Ali Suleman Habib was given command of Indus Motors Company, which was incorporated in 1989, and started production in 1993.
It was a joint venture between the House of Habib, Toyota Motor Corporation and Toyota Tsusho Corporation of Japan. It is also the maker of Pakistan’s most popular sedan, the Toyota Corolla. Habib was also the founding Chairman of the Pakistan Automotive Manufacturers’ Association.
Quickly, Habib realised that Indus Motors had two strengths. The Japanese strengths lay in manufacturing, while the Pakistani side of Indus Motors brought in the ‘entrepreneurial spirit’. This hybrid culture was at place at Indus Motors for first ten years or so of operations, To that end, he often brought in entrepreneurial personalities similar to him, such as Farhad Zulficar, the first managing director of Indus Motors, and Mazhar Valjee, CEO of Indus Motors from 2001 to 2003.
During his time leading the company, Habib developed a reputation as a hard task master, albeit a fair one. He was also considered a blunt and very straightforward person. This often did not sit well with other Pakistanis, but suited him very well when dealing with the equally blunt Japanese.
In fact, several said that Habib was particularly influenced by the Japanese method of getting a job done, and he admired their culture of honesty and punctuality. He also was a frequent traveler, particular to Japanese markets. This association with Japanese business standards was something that would stay with Habib, and marked him as somewhat unusual from other other businessmen in his home country. For instance, the Japanese standard was to keep a very low inventory at all times. This small detail was something that Habib tried to instill at Indus Motors.
Around the same time, the chairman oversaw the growth of Indus Motors during a particular interesting episode in the history of the country’s auto sector. Between 1985 and 2005, the auto sector of Pakistan had moved towards a localization process, in which companies had to phase in compulsory local content conditions.
Habib himself was a big believer in the localization process. But starting in 2006, the government of Pakistan replaced that with a tariff-based system, as the previous scheme was considered not compliant with Pakistan’s treaty obligations as a founding member of the World Trade Organization (WTO).
Increasingly, the formerly gung ho, entrepreneurial figure, was becoming a more detail-oriented and cautious person. Because of his foreign education, and extensive work with foreigners, Habib realized the importance of separating ownership from management.
So he paved the way for experienced management to come into the company at the ‘C’ level. It was his attempt to upgrade the hybrid culture that had so far existed in Indus Motors. As he told his incoming CEO, he wanted to create strong human resource systems, with a greater emphasis on safety and health. Along with the new CEO, he built a team composed of individuals from Ford, Honda, and Engro to create a more professional environment.
He allowed the talented team to flourish, though he still was quite personally involved in Indus Motors. Many will remember that Karachi experienced brutal episodes of sporadic strikes, violence, and kidnappning between 2008 and 2013. These incidents in some cases would even affect the smooth running of the plant. And yet Habib would make the daily drive from the leafy residential neighbourhood of KDA Scheme 1 to the Indus Motors assembly plant in Port Qasim every day, to personally make sure that supplies had arrived on time.
While Indus Motors was the backbone of the House of Habib, the family still felt it needed to create a lasting legacy. In part, they were inspired by Syed Babar Ali, founder of Packages Ltd, and also the founder of the Lahore University of Management Sciences (LUMS). After speaking to Syed Babar Ali frequently on the subject, the Habib family wanted to create a similar legacy – an educational institution in Karachi that was exclusively for the liberal arts, something different from what places like Aga Khan University and LUMS offered.
The main proponent of this project was again, Ali Suleman Habib. He ended up serving as the Board of Governors of Habib University (which was established in 2014), as well as a director on the board of Habib University Foundation and a trustee of the Habib Education Trust.
Habib was aware that he was out of his depth in this subject area. So he adopted a studious and focused persona on the topic of the universities, and listened attentively to the advice coming his way.
At Indus he had attempted to reign in the entrepreneurial side, and bring in a more organised approach; at Habib University, he recognised he had to do the opposite. Here, it was he who was the cautious, organised board member, though he deliberately picked a president, Wasif Rizvi, who he felt was entrepreneurial.
The yin-yang combination worked well. Rizvi would come up with zany, almost over the top expansion plans, while it was Habib’s job to see if it could be executed, or if the donors would accept it.
A little older and wiser now, Habib was open and candid about his mistakes at Indus Motors with the president, and other colleagues, which he did not want to make again in this new university project. Knowing that it was his family legacy on the line, he was careful about not rushing, or wanting too much too soon.
It was in the transitional period that many saw a change, as Ali Habib stepped up to take over the symbolic role as it were that his uncle had previously held. He was increasingly becoming the face of his particular generation of the Habibs, a fact that was only accentuated by his prominent role in the university. Still, as some noted, it did not engender his relationship with other siblings or cousins in his family. On the whole, as many have expressed, the Habib family had healthy internal dynamics.
At the university, Habib’s characteristic bluntness and assertiveness were on full display. Those who did not know him well could find him intimidating. But to those who did know him, he was a clear communicator, a not commonly found quality in Pakistani business circles – or for that matter, Pakistani academic circles.
In certain moments he could be almost overly cautious, but was quick to point out his own mistakes. A few months before the formal opening of the Habib University, the university president and administration showed a sneak peak of the campus housing plan to the Habib family. Ali Suleman Habib loudly proclaimed, “Many times I thought, this wasn’t possible, that it had not been achieved, You have proven me very wrong.” It was a moment that reflected his character, and once again, ability to step up, and let someone else’s achievements shine.
As the obituaries and condolences poured in in April, one stood out: the Prime Minister of Pakistan, Imran Khan tweeted about the loss of his old friend. In fact, several government officials expressed their public condolences.
Over the last 30 or so years, Habib had developed an extensive network of contacts in Islamabad, where he would fly frequently in order to discuss auto sector policies. The conversation initially centered around intense lobbying, of course, in favour of the auto sector.
But increasingly, government officials began to grudgingly appreciate, and in time respect, Habib’s views. His transparency about what he really thought of the government could sometimes alarm people. A close friend once cautioned him to not be so publicly open about his grievances; Habib responded with “Jo baat hai, woh baat hai.”
He also closely worked with the Pakistan Business Council, at one point serving as the chairman. Habib viewed this group as a way to channel what he thought were policies that could positively impact Pakistan’s businesses, and also help influence government policies that he did not agree with. In fact, in the last five months of his life he had been working on a six month long project on protecting jobs in Pakistan, and sensible import substitution. Habib basically housed himself in the Ministry of Commerce, where he had been talking to at least 30 different stakeholders, including the Federal Board of Revenue (FBR).
There were also government policies he wholeheartedly agreed with. For instance, he was a big proponent of the documentation drive, despite it in the short term negatively affecting car sales. But he felt he was important for the country, and strongly advocated the government to bring that particular amendment back.
It is for these reasons that almost every individual Profit interviewed referred to him as ‘a patriot’. He cared deeply about Pakistan, and his own strong views about how to improve and change the country’s direction. And as his life has shown, that was not just in the business sphere, but also in the philanthropic sphere, with Habib University.
On a much quieter level, Habib’s impact could still be seen on the ground – he donated Toyota Hiluxes to the Pakistani government during the 2005 earthquake, when it transpired that those were the only vehicles that could go manage the tough terrain. He also sent supplies and helped set up rehabilitation camps during the 2009 refugee crisis after the army operation in Khyber-Pakhtunkhwa.
On an even more personal level, he would often be seen promoting Pakistani culture at the various conferences he attended around the world. He was quick to introduce people, if at all interested, to Pakistani classical music, and if he had more time, then Urdu poetry.
Habib’s life was dedicated to making sure that his family legacy survived. Perhaps no greater compliment can be given than this: that he expanded upon that narrow definition of the family, and included the hundreds of Pakistanis he either helped indirectly through the companies he created, or directly through the university he helped build. And he did it all by allowing others to show him the way.