Leadership Quality of Kumar Mangalam Birla Essay

Are we doing anything we potbelly to help nation be the best they can be? asked Birla in the Q203 issue of The invigorated Manager. The suspicion is close to his heart. Since he took everywhere the reins at the Birla sort let on he has rivet on fine tuning the themes talent pool. If this meant taking lowering decisions Birla did not shy a trend. More than 350 ranking(prenominal)(a) managers left the classify. Some through innate attrition, differents through counseling, leaving space for sore faces and crude talent.Management means attracting talented people, nurturing them, developing them, and giving them space, asserts Birla, decisions get to be do at every level and decisions indigence to be quick. So, we be possessed of to spot, report and groom talent at every level of the organization, because more than people need to be making high note decisions. To build this culture in the pigeonholing, Birla has created a system found on meritocracy. His HR e nterprises f any beneath three panoptic heads cultivation and relearning, performance prudence and organisational renewal. For theoretical account Gyanodaya, the groups learning center f totallys in the original category.It helps in the transfer of best practices across group companies thus sharpening the groups competitive edge. The training calendar is handy to employees via Aditya Disha, the group wide intranet, and the teaching programs lie toss off of a mix of classroom, outreach, and e-learning initiatives. Birla has in addition instituted The Organisational wellness Survey (OHS) which tracks the satisfaction levels of 8,670 managers across the group. A direct issue of such initiatives is that forthwith his brand as an employer has enhanced significantly, allowing Birla to approach to some of the best minds and talent visible(prenominal) in the country.The group is considered among the acquit 20 preferred employers in Asia. For performance management Birla inst ituted the Aditya Birla Sun awards an annual internal awards system. hither each group company makes an outspoken presentation on their successes and failures to a group of 400 managers drawn from divers(prenominal) group line of business sectores. This leads to information sharing and also encourages kempt competition in the group. Birla believes that star per designers need appreciation and recognition. It is very consequential for people who atomic number 18 doing well to be told they are doing well, he says.He insists that performance levels tack considerably higher after a person/team receives an award. The Aditya Birla award is for teams spell the chairmans award is for privates. A group company that has won many such awards is Hindalco. Birla has transformed Hindalco into a globally competitive non-ferrous metals company. The first step was to mingle the copper sectionalisation of Indo gulf with Hindalco integrate the groups non-ferrous metals business under a ce company with 40% commercialise share. He acquired 74. 6 % equity jeopardise in Indal for Rs 10 bn to make it a wholly owned subsidiary of Hindalco.This made him the largest producer of atomic number 13 in India and straightaway Hindalco-Indal command a 70% mart share. Having made Hindalco competitive forthwith Birla is pursue market growth. He recently entered the Rs 2. 50 bn branded foil market. Within a course of study of launch Hindalco captured a 40% market share and put a robust distribution in place. hold year Hindalco launched of as many as five branded products. The launch of strain Alloy Wheels in early 2002, laughablely posted as dress code for your gondola car, was followed by the launch of its kitchen utility celestial orbit Freshwrapp aluminium foil and Freshpakk semi-rigid containers, and Everlast roofing sheets.Hindalco also introduced Al Planet, a unique exhibition format highlighting products from the substitute aluminium industry. For organic gro wth Birla has embarked on an Rs18 bn brownfield expansion at Hindalcos compound complex in Renukoot to increase aluminum metal might from 100,000 TPA to 342,000 TPA. This will hold Hindalcos leaders position in the domestic market and improve its exporting markets as well. But while Birla was revamping Hindalco, a move towards untangling the cross-holdings among group companies, a legacy of the licence raj, was also initiated.He unified his diverse companies under the Aditya Birla crowd head. If one were to encapsulate it (the group strategy) in a single word the overriding strategic theme over the prehistoric four years has been consolidation, says Birla. The process was threefold. Birla rearranged the companies, fused market presence in the different industries and then went on an acquisition fling to further strengthen leadership position. The result is a streamlined group with all aluminium companies merged under Hindalco, cementumum companies under Grasim, copper com panies under Birla blur and textiles and garments under Indian Rayon.Losing some of its vent making divisions also made Indo Gulf a debt free fertilizer company. In the process the groups revenues have risen from Rs 72 bn to Rs 270 bn in octette years. Our strategy dictates that we get out of businesses where we are bit players and strengthen the businesses where we have discharge competencies, so that we get to the exit of the compact or consolidate our position in that location, as the case may be. This leads to a live wire and tighter business portfolio with our firepower being better targeted, says Birla. Birla began with Grasim in 1995.His first step was to move the cement division of Indian Rayon to Grasim, thereby desegregation the cement holdings within the group. Then in 2003 he acquired the cement division of Larsen & Toubro for Rs 22 bn increasing Grasims total force to 31 MTPY. now Grasim is the largest producer of cement in India and the seventh largest in th e world. comparablely the copper division of Indo Gulf was divested and interconnected into Birla Copper. Then Birla increased the smelter capacity of Birla Copper from 100,00 to 150,00 MTPY and acquired two copper mines in Australia.Birla has been nicknamed the non-ferrous general by the industry his aluminium, copper, and cytosine black units are ranked among the top three in their respective segments. Indian Rayon also saw dramatic substitutes in portfolio. Its cement division was demerged. Then it acquired Madura Garments, the apparels and garments division of Madura Coats for Rs 2. 6 bn in January 2000. This bump offover gave Indian Rayon ownership of prominent brands Louis Philippe, Van Heusen, Allen Solly, Byford, woodpecker England and San Frisco. This marked a dramatic change in focus for the commodity based group.Though a major(ip) player in textiles, Birla had not been able to continue the branded menswear market. Building brands from scratch takes metre as well as money, and the easiest way was to acquire an established one. The apparels business is one in which we want a leadership position. We will make a think entry into the high-value, ready-to-wear segment. This acquisition as well as the acquisition of definite overseas brand rights has catapulted the group to the top of the league in the branded apparels market, says Birla. Today after a long tip of negative growth Madura Garments has reported a 14. % increase in revenues. As a part of the restructuring process he change Mangalore Refinery and Petrochemicals to ONGC. The exit from MRPL indicates our firm resolve to rationalized the Groups portfolio of businesses with a view on the future, and also bears testimony of our commitment to a key group of stakeholders our lenders, says Birla. The other major restructuring at Indian Rayon was demerging the insulator business into a new JV with Nipponese company NGK to sustain leadership position and to acquire a global market network for the insulator business.The consolidation initiative has allowed each company to emerge with a stronger balance sheet. The three largest companies in the group, Grasim, Hindalco, Indian Rayon, turned in a additive net profit of Rs 10. 55 bn in FY03, a jump of 2. 1% from FY02. Their unite sales increased to Rs 110. 45 bn in FY03, an increase of 36% over the front year. The groups overall revenues affected Rs 2,700 bn. Management musical mode Birla is his fathers son, but he has gradually genuine his own personal management style.Commonalities admit performance orientation, a strict optic for detail, close attention to budgets. Differences include more informal interaction with managers from top to fucking a greater gap in the midst of personal and office life and a strong emphasis on monetary performance. For example he has replaced the old Parta system, which cerebrate only on production with the hard currency Value Added method, which emphasizes profit might, asset p roductivity and growth. Birla is a firm believer in meritocracy. In his fathers time, there were some(prenominal) marwaris in top management. Today there are plenty of non-marwaris.He places a destiny of emphasis on HR and hired Santrupt Mishra from Hindustan Lever to spearhead the groups HR initiatives. A 360 degree feedback program that allows managers to question even Birlas own leadership style and does away with the babu culture customary in the group. But while on one hand Birla nurtures employees, on the other he is very careful well-nigh performance measures. Birla is equally adamant round strict adherence to policies and procedures that have been discussed and approved. For example he introduced a retirement indemnity, similar to the one Ratan Tata introduced over at the TataGroup.While a cresendo of unhappiness was perceive at Bombay House, peaceful silence reigned at Industry House. At Lever House, no doubt Vindi Banga is closely watching these events. Birlas retire ment policy saw 325 senior executives, between the ages of 62 and 65, step down after years of service. Though the policy was drafted in 2001, he took a year to implement. He then hired xcl young executives to infuse fresh and out of the box thinking in the group. I think its been one of the most important decisions Ive had to make, says Birla.People skills are Birlas biggest strength. He has the ability to get on with both the old guard and the new turks. Soft spoken and insistent Birla likes to be directly involved. For example he sends individual notes to employees regarding their performance. Debu Bhattacharya currently the managing director of Hindalco and another former Hindustan Lever employee says, it wont be an exaggeration to say that I united this group because of Mr Birla. For somebody who is from a super respected MNC in the country, going to an Indian business house, I had a lot of reservations.My reservations came from that perception of the group. But I was so over awed with his simplicity, his genuineness, and his ability to explain ingenuous things without trying to sell the job. If I had to take that decision all over over again Id do the same. For all this Kumar is a low profile person, with a sense of humor and the rare ability to laugh at himself. This ease spills into his business relationships. For example the stalemate between the houses of Tata and Birla is now history. Ratan Tata recently invited Birla to join the get on with of Tata Steel, and Birla just as easily accepted.