Making of an Indian MNC

Mr. Kumar Mangalam Birla
The Times of India
9 October 2005

The age of the Indian MNC is here. This is one of the most visible outcome of India's integration into the global economy. A key determinant of success for Indian companies will be our ability to strike global roots. We are well positioned for this challenge. The success of the Indian diaspora is the stuff of legend. As individuals, we have a long tradition of striking roots across the world.

My father, Aditya Birla, first looked beyond India 30 years ago. As globalisation picked up, 30 per cent of our turnover started coming from overseas. We plan to increase it to 40 per cent by the end of the decade. The underlying logic in many of our businesses is simple: If you want leadership position, you have to be global in it. While we have made significant strides in globalisation, our group still has a long way to go. And the challenges are many.

The first challenge is to develop a global corporate mindset. It's important to ask ourselves whether we want to be a true MNC or just an Indian company operating abroad. Many Indian MNCs have kept their overseas business in the periphery. I'm not disparaging that model. Many global MNCs too have evolved this way. But local roots have to be struck fast. The willingness to integrate is a great tussle between the intellectual conviction that they have to act local, and the ingrained comfort of doing it the way they have always done it.

Being a true-blue MNC is only partly about geographic spread. It's more about a mindset that wants to leverage resources seamlessly; that is eager to build unique capabilities to transcend the barriers of language and cultures to c;reate value. It's about being global in attitude, without letting go of your roots.

The second challenge is to make your people understand and respect local habits, cultures, etc. It's the organisation's task to make them aware and ensure that these blind spots do not affect the judgment of an employee's merit or performance.

The third challenge relates to establishing brand equity overseas. It's difficult to recruit the best if you are not a well-known established MNC or a large domestic corporation. There is no easy way to get around this. Indian companies need more time to be recognised.

In some countries, we have developed a high brand equity. But this has taken years of performance, good employment practices and good corporate citizenship. For example, in Thailand, a survey by Hewitt Associates in 2004 ranked Thai Carbon Black, one of our Group companies, as the No 1 company to work for.

The fourth challenge is that of developing a global pool of managerial talent. It's a long process — recruiting the best, training them, testing them in difficult situations, et al. In fact, we have even identified certain essential skill sets. Functional skills is one of them. A global manager must have an understanding of a country's historical and socio-economic background. Also, he must have the ability to think through seemingly unconnected global events, to decipher how they will impact the strategic architecture of our business.

Finally, there is a fifth set of challenges. These involve making one's globalised character successful and sustainable. What bonds us are our values — integrity, speed, seamlessness, commitment and passion. We expect these values to define the character of our corporation, and serve as a guiding principal for employees. Our values are a moral contract between the employees and the organisation. A contract that goes beyond business and economic transactions.