I do believe that our decision to consolidate — and the way we have gone about implementing it — has been sound. Firstly, we have operated our existing assets efficiently. As an example, I want to specifically mention our viscose staple fibre (VSF) business, from which I have learnt that with innovation and focused teamwork, a mature business can continue to grow. This 52-year-old business continues to better itself year after year, which says to me that truly, there is no end to improvement — it is limited only to the extent of our imagination.

Secondly, the assets we have built and acquired have been quality assets, complementing our existing strengths. Thirdly, the asset growth has been funded largely through internal accruals. As a result, every one of the companies in our Group has emerged with a stronger balance sheet. Fourthly, save for the IT and garments businesses, which are still at an incubation stage, the consolidation measures have started yielding the results that we had envisaged.

Performance measures
Having said this, what has it meant in terms of performance? Let's just look at numbers and let me use two performance measures. First, as you are aware, we adopted Cash Value Added or CVA as a performance metric three years ago, which is in consonance with our Group's focus on value addition. CVA, by itself, is a punishing measure in that it calls for superior returns on assets created and equity invested. Our Group's CVA has been positive. Given the stringent performance standards set by the CVA metric, and the fact that not too many companies in India have actually consistently delivered even a positive CVA, I believe that this is a commendable performance.

I must add that the market capitalisation of the Group correlates very weakly with the sharp increase in value addition, as measured by CVA during the same period. Even as I do not think we need to be drawn into the expectations game as fuelled by analysts, over a period of time, we hope that the market valuations will reflect our underlying strengths and performance.

Focus on people
I must add that the course of shrinking the business portfolio while placing larger bets in a few industries is a higher risk strategy, albeit with the promise of higher returns. Continuing to deliver superior performance whilst factoring in this potentially higher risk profile takes us to what I believe is our most important asset, one that is not reflected in any of our balance sheets — our people. Over the last several years, our focus as regards people has been, in a nutshell, to build a meritocracy. We have taken several initiatives which I would classify under three broad heads — learning and relearning, performance management and organisational renewal.

The most obvious outcome of our efforts on the people front is that our brand as an employer has enhanced significantly, enabling us ready access to some of the best minds and talent available in the country.

Second, our Organisational Health Survey (OHS), which is a well-regarded mode globally of tracking employee satisfaction, has thrown up very encouraging results this year, based on the tracking of 8,670 managers across the Group. While commendable work has been done at Gyanodaya — our internationally acclaimed centre of management learning — to accelerate the pace of learning, I believe that this is an opportune time to take the process to an even higher plane.

We are pushing even harder on the people front, building on the significant progress we have made so far, to press on with the task of building a meritocracy — not just of brainpower, but also of entrepreneurial power, dedication power, vision power, go-getter power and ambition power.

- Mr Kumar Mangalam Birla, Chairman, Aditya Birla Group

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