Full of purpose & focus, he led from the front

The Economic Times
26 September 2013

The ET award seeks to honour a leader who has clearly demonstrated a strategic direction for success, and pursued a vision.

Leadership is all about having a purpose and staying focused on it,"Kumar Mangalam Birla, 46, recently told students graduating from the Aditya Birla World Academy, an international school in Mumbai.

Birla has lived that mantra ever since he took charge of the diversifiedAditya Birla Groupin his twenties, after his father's demise. He has been leading with the 'purpose' of transforming the group into one that is globally relevant and competitive.

Under Birla, group revenues have grown 20 times from $2 billion in 1995 to $40 billion. Birla is now aiming for the $65-billion mark in three years.

The jury picked Birla as the 'Business Leader' for transforming the Aditya Birla Group from a traditional Marwari group into a global conglomerate.

Birla, who was part of the jury, stepped out when this award category came up fordiscussion. "I was ET'sBusiness Leaderten years ago. So, it (winning again) is a surprise and feels very good!" Birla told ET.

Two things stand out in the way Birla has led the group. First, many services businesses such as telecom and financial services, which Birla seeded, are now ready to take off.Idea Cellular, for example, has the largest market cap among all group companies.

Betweenlife insuranceand asset management, thefinancial servicesbusinesses manage around $20 billion of assets, making it one of the top five fund managers in the country. "He (Birla) puts time for all the businesses. Ultimately, it is the quality of the management," RC Bhargava, independent director on the board of Idea, had once told ET.

Second, 51% of the group's turnover comes from overseas markets. This, too, is to his credit.

"Kumar Birla can stay focused on long-term strategy against all odds," says SumantSinha, founder-chairman of ReNew Power, a clean technology startup. Sinha was the CFO when the group's aluminium companyHindalco Industries bought Novelis, a Canada-headquartered company four times its size, for $6 billion in 2007.

Many criticised the acquisition initially as the debt-laden Novelis appeared to be a drain on Hindalco's balance sheet. But a massive cost-cutting exercise helped put Novelis back on track in 2010.

The six takeovers Birla has sealed in the past three years are examples of transactions done when business sentiment is weak. The group today is a more diverse entity, and more youthful. The average age of those in the management cadre is down from 56 in the 90s to 36 now.

Undaunted by the economic downturn, Birla is now preparing his group for robust long-term growth prospects through capital expenditure programmes. Hindalco'sconsolidated capex spend was close to $2.6 billion (Rs 14,000 crore) during the last fiscal. Analysts say its cash flows will outstrip capex from 2015.

One of Birla's favourite sayings sums it up well: "Tough times don't last, tough people do."