A presentation on Kumar Mangalam Birla as a Strategics leader

Presented by Nirav Patel Shabbazudin Kazi Rohit Dadhwal Mehul Galani Vishal Kapasi

Bio - graphy
Born on 14 th June 1967 the great indian industrialist was the son of late Aditya Birla. His native place is Pilani,Rajasthan A chartered accountant, Mr. Birla earned an MBA from London Business School, where he is also an Honorary Fellow Chairman of the global conglomarate Aditya Birla Group. Director of the Central Board of Directors of the Reserve Bank of India Chairman of the Staff Sub-Committee of the Central Board of the Reserve Bank of India. He serves on the Prime Minister of India's Advisory Council on Trade and

About Aditya Birla Group

A US$ 29 billion corporation, the Aditya Birla Group is in the League of Fortune 500. It is anchored by an extraordinary force of 130,600 employees, belonging to 40 different nationalities. In the year 2009, the Group was ranked among the top six great places for leaders in the Asia-Pacific region, in a study conducted by Hewitt Associates, RBL Group and Fortune magazine. In India, the Group has been adjudged the best employer in India and among the top 20 in Asia by the Hewitt-Economic Times and Wall Street Journal Study 2007. Over 60 per cent of the Group's revenues flow from its overseas operations. The Group operates in 26 countries Australia, Bahrain, Bangladesh, Brazil, Canada, China, Egypt, France, Germany, Hungary, India, Indonesia, Italy, Korea, Laos, Luxembourg, Malaysia, Myanmar, Philippines, Singapore, Switzerland, Thailand, UAE, UK, USA and Vietnam. Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in the way of the need to keep learning afresh, to keep experimenting.

Companies owned
The Aditya Birla Group companies in includes : Hindalco Aluminium & Copper Grasim Cement & Vsf Ultra Tech Cement - Cement Aditya Birla Nuvo from manufacturing to service based products. Eg Adiyta birla sunlife Idea cellular - Telecom Aditya Birla Retail Aditya Birla Minacs BPO,IPO,CRM

Globally Aditya Birla group is......

A metals powerhouse, among the world's most cost-efficient aluminium and copper producers. Hindalco-Novelisis the largest aluminium rolling company. It is one of the three biggest producers of primary aluminium in Asia, with the largest single location copper smelter. No.1 in viscose staple fibre The fourth-largest producer of insulators The fourth-largest producer of carbon black The fifth-largest producer of acrylic fibre The ninth-largest cement producer Among the best energyefficient fertiliser plants

In India Aditya Birla Group is......

One of the leading cement producers The top fashion (branded apparel) and lifestyle player The second-largest producer of viscose filament yarn The second-largest in the chlor-alkali sector Among the top four mobile telephony companies Among top 10 Indian BPO companies by revenue size A leading player in life insuranceand asset management Among the top three supermarket chains in the retail business

Strategic Decisions by KM Birla...

Emphasis on meritocracy. Balance in portfolio Umbrella branding strategy Merger & acquisition

Emphasis on meritocracy
When Birla joined the company, he worked with managers who were nearly thrice his age. Seniority determined hierarchy, rather than merit. Birla spent quite a lot of time to change this. He put up performance management systems, reviewed compensations and emphasised on training to bring in meritocracy

Balance in portfolio
The birla was mainly concerned with the manufacturing business but they did not want to be called as only asset intensive industry rather it wanted to diversify rather than to be restricted to only one kind of product. They wanted to enter the less asset intensive business. They wanted to deal with servive and IT sector

Umbrella branding stategy

An umbrella brand is a parent brand that appears on a number of products that may each have separate brand images and covers diverse kinds of products which are more or less related. It applies also to any company that is identified only by its brand and history The idea is to move into two or three national brands. One, say, for normal ordinary portland cement, another for slag cement, another for speciality cement

Merger and acquisitions

It is wrong to say that birla group have stopped growing organically and they are only looking at M&As. Given the fact that they are in so many different industries, the landscape in each industry is very different. In some cases, there are opportunities to grow through acquisitions. And that we've done in the past two years. But in some other industries it may not be possible. So they are not wedded to any one option. We're looking at creating the best balance for us and for our shareholders in general.

Major M & A s
Aditya Birla Nuvo traces its origins to a modest beginning with the acquisition of Indian Rayon Corporation Limited in 1966. In 2000 Indian Rayon acquires Madura Garments, taking the Aditya Birla Group to the top of the league in the branded apparels sector In february 2007 Hindalco announced complete acquisition with the Novelis. he transaction makes Hindalco the world's largest aluminiumrolling company and one of the biggest producers of primary aluminiumin Asia, as well as being India's leading copperproducer. Aditya Birla Retail wing in 2007 acquired Trinethra as a part of its larger plan to enter multi-format retailing in India. AB Retail acquired 90% of the shareholding in Trinethra. The other 10% remained with India Value Limited, a private equity investment fund that had been the majority shareholder in Trinethra before the acquisition. In CANADA - TransWorks Information Services Ltd, a unit of Aditya Birla Management Corp Ltd's Aditya Birla Nuvo Ltd subsidiary, acquired all the outstanding common stock of Minacs Worldwide Inc (MW), a provider of Business Process Outsourcing (BPO) services In 2009 the board of directors of UltraTech Cement Ltd, a unit of the Aditya Birla Group, and affiliate Samruddhi Cement Ltd agreed to merge to create the countrys largest cement firm with a 20% market share and total capacity of 48.8 million tonnes per year

9 learnings and others.......

lesson-1:
The first is the ability to manage time effectively because an organisation in a state of flux throws up many more demands on your time as compared to one in a steady state. And the second area is that of energy management because the process of change can be rather exhausting, both physically and mentally, and requires sustained levels of high energy over a prolonged period of time. So the first lesson for them has been that the process of change is perhaps 90% about leadership and only 10% about managing

Lesson 2
In 1996, Birlas launched for the first time a Corporate Identity. The intent at one level was simply to have a group identity that would serve as a corporate logo. We chose the rising sun. That the impact of a symbol can be so enormous is something that took us by surprise. The learning was quite striking. The need to relate, to belong to a club, to an association, basically to some sort of fraternity is inherent in all of them . The corporate identity served that need, as also as a proxy for a charismatic leader who was missed greatly. At another level, it made an emotional connect that wove the group into an integrated whole. The Rising Sun, in a strange way, brought a new optimism and served as a rallying point for the organisation. That really, in a strategic way, was the first positive step for them in their process of change. The lesson they learned is that symbolism can and does have a positive effect

Lesson 3
A critical area in any change process is that of communication. The process of transformation is about communication, communication and more communication. In the case of a corporation going through the pangs of change, kumar mabgalam birla do not believe that anyone can ever over communicate. And he cannot think of any instance in their case where the change process was set back because of over-communicating. Using technology to advantage in communication can add a zing to the process. Reaching out to as large an audience as possible, engaging with small groups, opinion makers and those who may be impacted adversely, is obviously critical . And communication is the key to making this happen. On a more serious note, the point to be made is that it is important to customise communication, so that different audiences within the organisation understand the message in its right context, in the way it was intended . So, the third take away for Birlas was that when they succeed in the transformation, it is because your communication worked

Lesson 4
Different people have different roles to play in the process of change. He believe that the management of most organisations focuses sharply on high performers That is, of course, important but, I do believe that what is equally important, is to focus on that bulk of the organisation who are somewhat dismissively referred to in management jargon as 'the stayers'. These are people who make the day-to-day, month-to-month, quarter-to-quarter things happen. Their role in the process of change is critical. Just as 70% of the human body is made up of water, so also 70% of any organisation is made up of people who follow the rules, who keep it moving ahead at a steady pace. You cannot have everyone setting the rules. The organization need people who follow the rules, people who may not contribute in a significant way intellectually, but who are happy to implement the rules diligently.

Lesson 5
There is something to be said about the virtue of organisations that are heterogeneous in their composition. Our experience has been that a heterogeneous mix of people, though very difficult to lead, helps in the process of change. You need the pacers, the spinners, the good wicket keepers just as much as the pinch hitters, to become a winning team. Bringing in people from organisations with different cultures, who have different skill sets, a different pair of eyes, can be useful, so long as they all bond with the basic values of your work place. So, moving away from homogeneity or creating a climate that embraces different cultures and gives them wings whilst keeping the organisation rooted in its core values, can be a productive exercise and a useful catalyst in the change process

Lesson 6
It has been their learning that it is good to analyse failures. The birla group does this not merely to not repeat the same mistakes, but equally to showcase success. They have created a platform called the Aditya Birla Awards where team achievements across the organisation are recognised every year. The genesis of these awards is that each one of them needs some-thing to be inspired by, more so, when they are being stretched in all directions in the process of metamorphosis. Importantly, it has been the belief of Birla Group that whilst the individual stars, the sterling performers are important, it is the creating of star teams across the organisation that is most critical. Individual stars who cannot become a part of star teams, are of little value.

Lesson 7
A considerable part of the change in the Birla Groups case reflects shifts in geography as well as a rapid pace of mergers and acquisitions. The result is that the organisation is faced with the challenge of having to integrate with a culture that is foreign to it and practices it has been unexposed to. Kumar Mangalam Birla says that their long-standing presence overseas and the exposure it brought with it, has made the task of adapting to different cultures a lot easier. All the same, an attitude of willingness to learn and assimilate from different cultures is an absolute must.

Lesson 8
Tracking the organisational climate, especially in a process of catharsis, they believe is critical, simply because you cannot set a problem right until it is correctly diagnosed. Kumar Mangalam Birla has relied heavily on the organisational health study methodology. . Tracking organisational health has become an institutionalized process for them and has paid immense dividends. So, the learning on this front has been that seeking feedback in an institutionalised way and acting on it is a huge positive in the process of change. The underlying philosophy is that whilst it is the duty of the management to ensure that the company is a good employer, the responsibility for ensuring that it is a great place to work in is shared across the length and breadth of the organisation.

Lesson 9
Today, every organisation puts a premium on speed. Birla Group loathe anything that is not fast enough, for obvious reasons. In a process of transformation however, one learning that stands out for us is that it is only infinite and indefinite patience that brings immediate results. Different parts of the organisation respond differently to the change stimuli. It is unrealistic to expect the transformation process to take off at the same pace throughout. Internalising the process of change takes its own course however fast one might wish to push it through. There is no getting away from it and therefore there is no substitute for consistency.

Conclusion
Lastly we can say that much of the change process for the Birla Group has been much about learning, unlearning and relearning, and Mr kumar Mangalam Birla have been to cull out the important strategies which he believe are key to their transformational process. He brought in radical changes, changed business strategies, professionalised the entire group and replaced internal systems.

Thank You