Kumar Mangalam Birla on the Principles and Practices of the Aditya Birla Group

Kumar Mangalam Birla on the Principles and Practices of the Aditya Birla Group

by Sourav Majumdar | Mar 12, 2014

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No other business group spells Marwari enterprise and success as much as the Aditya Birla group. The man at the helm, Kumar Mangalam Birla, explains the principles and practices that have shaped its success

The name Birla is synonymous with the spirit of enterprise and the dizzying heights of success achieved by the Marwari community in the world of business.

As the leader of the $40 billion multi-diversified conglomerate, the Aditya Birla Group, Kumar Mangalam Birla, 46, has steered the empire earlier headed by his iconic father Aditya Vikram, creating what is today an Indian multinational straddling 36 countries in businesses as diverse as metals, carbon black, viscose staple fibre, mobile telephony, cement and fertilisers, among others.

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The Aditya Birla Group stands as an important testimony to the manner in which a traditional Marwari business empire has transformed into a modern-day business group, embracing top-notch professionals across the world while, at the same time, remaining deeply in touch with its traditional values.

In this email interview, Birla dwells on the factors which shaped his business philosophy, the mix of tradition and modernity and the Birla style of management. Excerpts:

On being a Marwari and how it has shaped him as a business person
Value creation, the culture of productivity, efficiency, prudence in financial management and the parta system, where you worked on a daily profit and loss account, are among the traits that I clearly saw in the Birla family. These have been great enablers which, with time and technology, one has been able to hone further.

I do believe that most of these principles are embedded in traditional Indian entrepreneurs. When you grow up in a business family, subconsciously a lot of learning happens. It might just be catching conversations across the dining table. And all of that influences you.

On the balance between traditional management and modern practices
The control and command chain, extremely hierarchy-oriented, where information is power and seniority is in terms of years, formed the major planks of the traditional management style. This had to change because the business context has changed dramatically. Of course, we carry forward the family legacy of values, the trusteeship concept of management, the philosophy of building businesses for the long haul—all of which are invaluable.

Our continued thrust is on ensuring that we remain a meritocratic organisation.  Today, we are a multi-ethnic, multi-dimensional group with a bench strength of 1,36,000 committed people, spanning 42 nationalities, across six continents.

As our group continues to expand globally, we recognise fully well that we have to be contemporary and move with the times.

We have embraced most modern management practices. We lay big bets on people, providing them with unparalleled opportunities, dynamic challenges and an environment that is professionally rewarding and personally fulfilling. In a highly competitive world, high-performing teams and individuals, supported by a strong performance culture, are the cornerstones of all that we seek to achieve.

On professionalisation of management and whether that is integral to business groups
This is not an option. The changing business landscape and the globalisation process, with competitive pressures increasing across every business, have made the professionalisation of management a compulsion. We have had an edge. Way back in the early 1980s, my father, a visionary, had already begun the process, putting India on the global map by setting up world-class companies.

For us, the professionalisation of management includes not only the induction of the best talent but also a culture that stokes entrepreneurial drive, thinking afresh across all levels, to be a learning and growing organisation that is constantly creating value for our multiple stakeholders. Our leadership is inclusive and has a penchant for collaborative and innovative solutions and for new ways of working. This is so that our companies, our products and our services are on our clients’ and customers’ radar all the time and we remain competitive.

On the biggest influences in his business style and learnings
My father, Aditya Vikram Birla, is my greatest guru. And my learnings: There is no substitute to smart hard work. Create leaders. Embrace change.  Innovate constantly. And, finally, the quality of your future depends entirely upon the quality of your imagination, of what that future can be, today.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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