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17
November 2007
Outlook Business
Born
into the fourth generation of a socially
minded business family, there was very little
left for Kumar
Mangalam Birla to add to the corporate
social responsibility ethos that was so
strongly present in the Birla clan. His
great grandfather, Ghanshyam Das Birla,
built and ran his business on the principle
of trusteeship — for him, the society's
well-being was as important as the company's
wealth creation. Among other things, GD
Birla funded the freedom struggle, worked
closely with Mahatma Gandhi, and founded
the Birla Institute of Technology and Science
(BITS), Pilani. Kumar's father, Aditya
Vikram Birla, took the Group one step
further — he introduced the principle
of sustainability to the Group's corporate
social responsibility (CSR) programmes,
replacing plain vanilla philanthropy with
projects that create independence rather
than dependence.
New breakthroughs
But, there is one big contribution that
Kumar has made besides expanding the rich
heritage left behind by his predecessors.
He has brought in order, new management
processes and technology and streamlined
the Group's social initiatives. "Every
generation of the family has added to the
Group's CSR vision and commitment. But he
(Kumar) has really insitutionalised it,"
says Rajashree Birla, Kumar's mother, a
director in all Group companies and the
head of Aditya Birla Group's social sector
projects. This apart, Kumar substantially
expanded the scope of the Group's CSR initiative
— over Rs.150 crore is spent in hundreds
of projects in 3,700 villages, touching
the lives of seven million people every
year in some way or the other. "It
is our collective responsibility to narrow
the inequities that exist in our country,"
says Kumar Mangalam Birla, Chairman of Aditya
Birla Group.
But institutionalising the CSR work has
been his biggest breakthrough. Today, all
of the Group's social projects are implemented
through the Aditya
Birla Centre for Community Initiatives and
Rural Development. These are implemented
and monitored with the same intensity with
which business projects are handled. In
fact, the social vision of Group companies
are integrated with their respective business
plans. Rural development projects have a
one year plan and a three-year rolling plan.
Like company budgets, social projects are
also assessed against annual targets set.
And just like company financials are audited,
social projects, too, are audited by external
agencies.
There is also a clear management structure
in place for the CSR organisation. Four
heads operating at the national level and
a team of 250 members make up a well-oiled
machinery. The plant head is also held responsible
for CSR activities. Four days out of every
quarter are spent reviewing all projects
with many centres hooking up with the core
team at the Aditya Birla Centre for Community
Initiatives and Rural Development through
video conference. Another three days every
year are spent for reviews and rewards.
The Group Chairman sits through many presentations.
"Kumar has brought in "sophistication"
in the processes," says Rajashree Birla.
So much so that the Group's CSR organisation
has become a favourite poaching ground for
other companies seeking to start or ramp
up their own CSR initiatives. "Recently,
some companies took people from our social
projects team," says Rajashree Birla.
"First, we felt sad. Then, we felt
happy because these people would take our
standards into other companies. That is
good."
Change
of focus
Institutionalised
systems and processes in the CSR work has
become important for the Group after it made
a major shift from philanthropy to sustainable
projects. "Adityaji used to say that
rather than give a man fish to eat, it is
better to teach him to fish. Since his time,
we have moved away from cheque-book philanthropy,"
she says. "Doling out money will clearly
perpetuate a culture of dependency,"
she adds.
She
gives the example of a favourite project of
hers — the Aditya Birla Centre for Welfare
of Children, in Chembur, Mumbai. The centre
picks up deprived children in the mid-teens,
grooms them and teaches them a skill, mostly
at an Industrial Training Institute (ITI).
Over 2,000 children have passed through the
three-year programme at this centre and 90
per cent of them are now doing well.
Similarly,
at any given time, the Group works on 250
villages with the aim of lifting people living
below the poverty line above it. Much of this
is done through sustainable projects. For
example, in a village in Jharkhand, a group
of women were taught tailoring. They were
then linked to a retailer in a nearby town,
who provides a steady stream of income to
the women by having his garment merchandise
stitched by them.
In another village, women were trained in
carpet-making and were linked up with exporters,
who also provide wool and designs to the women.
This goal of self-sustaining model villages,
has been accomplished in 80 villages, and
80 new villages have since been added.
Another
example is the rural technology park, a campus
set up in Renukoot, Uttar Pradesh. This focuses
on capacity building and trains hundreds of
people in a variety of skills and provides
advanced research and healthcare services.
Another of Kumar Mangalam's defining contribution
to the CSR projects is in getting the Group
to follow triple bottom line accountability.
This forces Group companies to seek economic
success and be socially and environmentally
responsible. All Group companies report progress
on all three areas in their annual report
to shareholders.
The Group is also using technology to get
more value for every Rupee spent in the social
projects. For example, the Aditya
Birla Memorial Hospital, built on a 16-acre
site in Chinchwad, near Pune, also provides
tele-medicine consultation to many villages
that are linked online.
CSR initiatives of the Group are focused on
five areas — education, healthcare and
family welfare, sustainable livelihood, infrastructure
support and social causes. "The philosophy
of caring, giving, developing and empowering
an under-served people is part of our Group's
DNA," says Kumar. But as Birla has been
taking the business global, through the Novelis
acquisition, for example, the vision of the
CSR team is also going global.
"We are working to start a vocational
training centre in Thailand," says Rajashree
Birla, who has visited the upcoming facility.
A health care centre is also being set up
in Egypt. Charity begins at home. But at times,
it can cross national boundaries as well.
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