Mr. Kumar Mangalam Birla
Chairman, Aditya Birla Group
The Economic Times
10 August 2009

The key to becoming global is to create leaders who can manage global businesses. I mean, leaders who have the ability to be effective across geographies, nationalities and cultures — leaders who excel at collaboration, innovation and managing change. In our experience of the last 15 years, these are individuals born with certain traits, but moulded into becoming global leaders, through experience, coaching and supporting teams.

Being a true-blue MNC is only partly about geographic spread. It is relatively simple to address cross-border issues pertaining to technology, finance, markets and products. But extremely difficult to cope up with challenges relating to the human dimension. Global leadership is all about developing a mindset that wants to leverage resources seamlessly, across geographic boundaries. A mindset that is eager to build unique capabilities, to transcend the barriers of cultures in order to create value. It’s about being global in attitudes — but without letting go of your roots.

One of the major challenges that we have had to grapple with is developing sensitivity and respect for cultural differences. For instance, in India the workday can stretch to 10 or 12 hours. Our Indian expats would often bemoan the employees in Canada who troop out sharp at 5 pm. But we need to remember that in those countries it’s more important that you work efficiently between nine and five. It’s the organisation’s task to change these biases and to see that these blind spots do not affect the judgement of an employee’s merit or performance.

The cultural shocks show up everywhere. For example, in our Group, an Indian manager who moves to Thailand takes time to adjust to the fact that the nightshift has only women workers, something that would, until recently, have been illegal in India. But without exception, our global leaders have always excelled at the skill of adaptation to cultural nuances, and to the local milieu. Another major challenge we grappled with is acceptance and establishing a brand equity outside India. I believe Indian companies will take some time to move up the ladder on both these scores. I say this based on our own experience, particularly in South-East Asia, where we have been operating for over four decades. Our Group has established strong brand equity through years of hard work and sustained performance, following best employment practices and being a good corporate citizen.

When foraying into new economies, the story is different. Let me share our experience of acquiring the A V Nackawic Pulp Plant in the Province of New Brunswick in Canada three years ago. This pulp mill had been shut for four years. We had to convince and win over diverse constituencies. Our team had to make presentations to groups of the local community, whose livelihood depended to a large extent on restarting the plant. Our team effectively allayed all fears. By the end of the process, the employees were convinced that they would rather work for an Indian multinational with credibility than for the local company that presided over its shutdown earlier. Our acquisition team was taken to the provincial Parliament where they received a standing ovation.

The hallmark of our overall leadership development efforts has been our belief in taking “bets on our people”. This largely stems from our innate trust in people’s ability to stretch and learn. Our entrepreneurial DNA also encourages risk taking which includes taking risks with people. We believe that people are endowed with immense capability — our task is to spot them early in their careers and provide them with suitable opportunities to test their skills. I would like to share two of our leadership development initiatives.

One, our leadership development initiatives are specifically tailored to the business context. We have articulated for ourselves who a global manager is for us, what leadership talent looks like, and what kind of leadership talent we need. This is done to provide clarity to all our leadership role aspirants to benchmark themselves against desired standards and monitor their progress.

Two, a rigorous assessment process across the Group assesses people early in their career on their potential to hold leadership roles. This pool of talent is developed through a series of planned exposures, assignments and training opportunities so that they are prepared to take on leadership roles as and when these emerge.

The first critical component of becoming global is to create leaders with global mindsets. And the second component: values, vision, passion, commitment and ambition count most. In the mid-1960s, a young man, a freshly minted graduate from MIT, felt strapped by the tyranny of the licence raj in India. Rather than wallow in self-pity, my father, Aditya Vikram Birla set his sights outside India on South- East Asia. Over the next three decades he made significant on-the-ground investments across the South-East Asian region, earning immense respect for both himself and his country. And, this was long before globalisation was even part of our lexicon. It was sheer enterprise and looking back now, clairvoyance.

At a business level, let me also recount an instance of how dedication, commitment and high morale can translate into results at the ground level. Our Thai Carbon Black factory is located at Angthong, just outside Bangkok, and is one of the largest in the world and a pioneer in carbon black technology. Carbon black is the major raw material for tyres. Not surprisingly it is an important supplier to the largest tyre companies in the world.

Three years ago, Angthong experienced torrential rains and all the factories in the vicinity, without exception, had to shut down. The management and workmen of our unit were, however, determined to make shipments on time to a customer who was in the midst of critical testing for new technology tyres. A truly committed team of workmen and managers took charge. They used wood from the crates used to supply carbon black to make canoes that they steered through the water to meet their supply commitments. This kind of resourcefulness is way above and beyond the call of duty. It’s inspirational.