K M Birla Speaks

A near full-house audience at the Nehru Centre auditorium listened with rapt attention as Kumar Mangalam Birla, Chairman Aditya Birla Group spoke about his experiences in ‘Adapting Traditional Businesses to the Modern World’. The event was the latest one to be held under the banner of the Inspiration Series, a platform created by Palanpur Online and Palanpur Samaj Kendra (PSK) to help younger members of the community understand new opportunities within and outside the diamond business and achieve success in the face of the current changing and challenging times. 

The programme started with a short welcome address by Ashish K. Mehta, following which Kumar Mangalam Birla began his presentation, which he said, would address the changes that had taken place in the Group in three broad areas – Business Portfolio, People and Culture.

Recalling that economic liberalisation had just been introduced when he assumed Chairmanship of the Group in 1995 following the untimely demise of his father, Birla said that at that time businesses were all adapting to the change. The Group needed to evolve to stay relevant and continue its successful journey. There were new opportunities to be tapped, new territories to be explored. New business segments such as retail, electronics, communications etc were opening up.

K M Birla in discussion with
Russell Mehta & Rohit Kothari

The Group decided its mantra would be Focus, and followed the principle of 1, 2, 3 i.e. to remain in a business only if it was one of the top three players and could influence the direction the sector was taking. Some businesses were sold, including one of the oldest in the Group – spinning, and the money generated was used to acquire new businesses, primarily along the value chain in those sectors where the Group was already strong.

In the 20 years since then, the Business Portfolio has been significantly transformed. The Group is present in many more countries than before, and has many new nationalities under its fold. It has shifted away from being a largely manufacturing-based entity and the share of revenue from services has risen from 1% to 12%.

Changes in the business environment also meant changing the approach on the People front. While earlier the focus was on production and efficiency, now there was need for new skills such as HR, Marketing, Data Analysis and so on. The Group did not have the luxury of time to learn these skills and began to focus on drawing in new professionals who were outstanding performers.

The aim was to build a meritocracy – the professionals were given responsibilities and also rewarded if they outperformed their peers. Believing that talent can succeed across sectors, the Group transferred outstanding indviduals across companies.

The demographic profile of the Group has changed in the process – while there are over 4,000 employees who have been with the Group for over 20 years, the average employee age has come down from 56 to 37, and the aim is to further bring it down to 31 in a few years. The percentage of those under 35 has increased from 23% to 46%; women now comprise 11% of the workforce as against 1% earlier, and 100% of the professionals are graduates.

A view of the audience

Today, on the People front, the Group has created a Culture of Performance, and there has been a virtual hiring freeze to promote talent within. Certain inviduals perform dual roles in different group companies under the 2x2x2 programme. Responsibility is delegated and people are trusted to perform. However, it is not enough to be a Star; one has also to be able to function within a Star Team.

Simultaneously, the Group also realised that it had moved away from the homogenity that prevailed a few decades ago when most of the senior functionaries came from similar backgrounds and had common cultural roots. With growth it became clear that the inherent DNA of a cement company was different from that of a retail entity. With the Group existing across sectors and countries, a common culture was no longer possible, but the focus shifted to having common shared Values. Some of these are Integrity, Commitment, Passion, Speed and Seamlessness.

Birla concluded by saying that the Group focuses on differential rewards to encourage those who perform to do even better.

During the Q&A based discussion that followed – intiially with panelists Russell Mehta and Rohit Kothari, and later with the audience, Birla stressed a few important points.

He said it was essential to plan your work and work your time; individuals need to have gurus/mentors they can turn to for advice and guidance; discipline and teamwork are important, as also shraddha and saburi (faith and patience); decide the things that need to change and those that do not -“Don’t try to fix what ain’t broke”; achieve a work-life balance and build a self-sufficient organisation; focus on your strengths and do not get overly concerned with what the competition is doing; be passionate about work; give youth the freedom to choose and encourage entrepreneurship, which today is like a Badge of Honour.

The meeting concluded with a Vote of Thanks by Ashish “Bobby” Kothari.