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Day 3: Metropolis

india Updated: Nov 19, 2008 10:14 IST
Lina Choudhury-Mahajan
Lina Choudhury-Mahajan
Hindustan Times
Lina Choudhury-Mahajan

When Daljit Singh Sethi wanted to get a few routine pathology tests done five years ago, he went in search of a lab. He finally settled on Metropolis. "I was struck by how different it was," recalled the 60-something Singh. "Everything went very smoothly - from filling forms, to getting the tests done, to getting my results. Their machines are good. So are their customer relations. The staff is courteous, informed and efficient." The procedure, which would have normally taken at least an hour, was over in just minutes. Since then, he has been back every year.

Idea
That's exactly the kind of customer loyalty that the pathology lab chain's founder, Dr Sushil Shah, wanted his labs to generate. Right from the start, he wanted his chain to aspire to international standards and stand out both for the wide array of tests it offered and its quality of service.

"I wanted the process, from the time the patient comes in to the lab to the time he leaves, to be one smooth operation. There should be no waste of time between each step of the tests and papers being filed," Shah, 60, explained, sitting in his giant swivel chair behind his mammoth desk at his Worli office, from which he runs a chain of laboratories in India and abroad. He claimed Metropolis processes most requests in three to five minutes.

Metropolis provides a large menu of tests, including some rare ones like the HIV drug resistant test, which involves reading the genetic code of the virus to detect mutations - differences from the original HIV virus.
Besides giving Mumbai its first state-of-the-art chain of pathology labs, Shah introduced the concept of professional home health services five years ago. As part of this, Metropolis sends staff to a patient's home to conduct the tests there. This visit is free if the cost of the test, or tests, exceeds Rs 1,000.

"We have tried to keep all our prices at least 20 to 25 per cent lower than that of most private hospitals," said Shah, adding that they were now extending the home service to Dahanu, Karjat, Dombivli, and Panvel. This will no doubt add to the 1,500 labs and hospitals that now send them tests.

Today, Metropolis Health Services, which has an annual revenue of Rs 100 crore, has labs in 125 cities across the world and employs more than 2,500 people. In India it has labs in cities such as Mumbai, Chennai, Bangalore, Pune and Cochin, and abroad in Sri Lanka, UAE, South Africa, Seychelles and Thailand.

Business
After graduating from Mumbai's Grant Medical College as an MD in 1976, specialising in pathology, Shah did not care much for the two options open to him, namely joining a hospital laboratory or becoming a teacher at a private hospital.
"When I saw the condition of these labs, I realised I couldn't spend my life working like that. I really wanted to start my own practice," he said.

So he set up his own lab in a 150-square-feet area in the kitchen of his father's nursing home. A few hospitals began sending their samples to his lab. As his practice expanded, he set up a second lab, and the business began growing.
Still, Shah was not completely satisfied with what he was delivering. "Although I had every kind of equipment, I was told that I was not as good as referral labs abroad," he said. To find out what was missing, Shah travelled abroad. "I toured as many high-tech labs as I could, and realised we weren't as streamlined as them. Abroad, there was no time wasted between procedures. All processes were in place, so it was just a matter of getting the patient through them quickly and efficiently."

Upon his return in 1993, fired up with the ambition to create a chain of world-class pathology labs, Shah went about streamlining the services in his own labs with a vengeance. "At the time, all labs, were small set-ups owned by individuals. Even in the US, at that time there were more 25,000 laboratories, which have gradually consolidated to less than 100," he said. "I also realised that there were no international chains. All the laboratories were restricted to one country. Therefore, we felt that we should have an international chain and not just restrict ourselves to India."
But this did not happen overnight. Between 1995 and 1998, he resigned from various other posts, including as head of Breach Candy Hospital's pathology department, so that he could concentrate on the business. In 1999, he started labs in Jaipur and Hyderabad in partnership with D. R. Mehta, the former head of the stock market regulator, and a local businessman respectively.

The partnerships did not work out. Dr Shah realised he would have to go the distance alone. But he did need help. "I was a doctor, not a marketing expert," he said.

But his daughter Ameera was. Trained in the US, she was then working with Goldman Sachs at that time, but was thinking of returning to India. "She was in two minds. I told her, if you want to be a top executive, you are in the best place. But if you want to be part of an exciting new venture and start from scratch, you can come and join me." She came back.
Shah's other daughter, ironically, is a pathologist at Jackson Memorial Hospital in Miami. "But I got the marketer," he said laughing. Shah also recruited two other doctors, S K Velu, and Ganeshan. "I knew I had my core team in place," he said.

Success
Between 2001 and 2008, Shah acquired 50 labs across the country and 17 across the world, including labs in Delhi, Pune, Chennai, Cochin, Coimbatore, Kannur, Alleppey, Kolkata, UAE, South Africa and Seychelles.
But as Shah ventured to acquire them, he realised that he was expected to pay for them upfront. "I somehow raised the money via internal accruals," he said. "But I decided not to take any dividend from the company - only our salaries. We did this for two or three years."

His patience paid off when ICICI Ventures, a private equity player, finally decided to partner with him. "Metropolis's acquisition-led business model, coupled with the high growth phase in its segment made for an attractive investment proposition," said Anand Vyas, director of the financial firm's private equity group. "ICICI Venture sees itself as a catalyst, and it is our endeavour to partner with people or organisations with a strong and clear vision, with a blueprint to bring about positive changes in the Indian economy."

Today, the business has matured, and Shah has a dedicated team to help him manage it. Velu looks after business development, new ventures, and international operations; Ameera takes care of marketing the 45 Indian labs; Ganeshan, as financial director, worries about the financial and legal systems. "I am the chairman, but I get hardly five emails a day," Shah said, with a smile. "But I do look after quality control, which involves the equipment we buy."
To ensure that everything is streamlined, Metropolis has five service departments: clinical labs, preventive health check-ups, hospital lab management, clinical research and imaging service labs, which together employ 1,000 people. The company also has about 60 sales people and a five-member marketing team across the county. But these teams are careful not to push doctors to over-prescribe tests, Ameera was at pains to point out.

Shah follows a system of consensual decision-making. The management team meets once a month to review all aspects of the business. "We take joint decisions about every new venture. We are four minds working together and can work out problems better," he said.

But some ground rules are written in stone. For instance, if even one member disagrees with a decision, it won't pass. "It is up to the person who comes up with an idea to convince the rest. If he or she can, it will be implemented," Shah explained. This includes any decision that he himself might make.

The discussions don't end there. The core group passes its views on to another team, which includes senior people and experts in the field, who also give their opinions. "I see it as five more points of view," Shah said. This time, if not everyone agrees with the decision, it is put to vote.

Shah has always been open to suggestions and advice. For instance, he first gave his chain the unimaginative name of 'Dr Sushil Shah'. "As we began to expand, I realised the name wasn't global," he said. "Also, I wasn't always there when patients called for me. I realised the name was making me appear less credible." When his wife suggested the name Metropolis in 1994, Shah swiftly adopted it.

Future
Shah, who grew up in Gwalior, said Mumbai had played a big part in his success. "When I started out, this city was considered the Mecca of medicine. So the fact that I was in operating out of this city gave me a certain amount of credibility."

Asked what had posed the biggest obstacle, Shah confessed it was his own mindset - in particular, his aversion to risk. He also now feels he should have relinquished all other posts he had held at other medical institutes much earlier to concentrate fully on his business. "If I had started working on my dream in 1990, I would have had a head start of 10 years," he said with a tinge of regret.

Still, he's hardly done badly for himself. Shah, an avid trekker, and tennis and squash player, has two farmhouses, one each in Panchgani and Bhoisar, which he visits every month.

His goal now is to expand his network of labs in India. By the end of this year, Metropolis aims to be present in five or six more cities. But his immediate plan is to set up shop in Thailand. "We are looking at eight or nine opportunities, out of which at least four or five should work," he said. Shah may have learnt to run risks, but he obviously takes no chances.