Leadership Quality of Kumar Mangalam Birla Essay

be we doing everything we can to help people be the best they can be? asked Birla in the Q203 issue of The Smart Manager. The question is close to his heart. Since he took everywhere the reins at the Birla collection he has focussed on fine tune up the multitudes gift pool. If this meant taking hard decisions Birla did not start away. More than 350 senior managers left the conference. Some finished natural attrition, others through counseling, leaving space for new faces and new talent.Management means attracting quick-witted people, nurturing them, developing them, and giving them space, asserts Birla, decisions need to be made at every level and decisions need to be quick. So, we construct to spot, incubate and groom talent at every level of the organization, because more people need to be making high quality decisions. To build this culture in the group, Birla has created a system base on meritocracy. His HR initiatives fall nether trinity broad heads learning and r elearning, gondola carrying into action management and organizational renewal. For example Gyanodaya, the groups learning center falls in the first category.It helps in the transfer of best practices across group companies thus sharpening the groups competitive edge. The training calendar is accessible to employees via Aditya Disha, the group wide intranet, and the didactics course of studys consist of a mix of classroom, forbiddenreach, and e-learning initiatives. Birla has also instituted The Organisational Health Survey (OHS) which tracks the bliss levels of 8,670 managers across the group. A direct take of such initiatives is that today his disfigurement as an employer has enhanced significantly, allowing Birla to access to some of the best minds and talent for sale in the country.The group is considered among the run 20 preferred employers in Asia. For performance management Birla instituted the Aditya Birla Sun awards an annual internal awards system. Here each group family makes an open presentation on their successes and failures to a group of four hundred managers drawn from different group argumentationes. This leads to in formation sharing and also encourages anicteric competition in the group. Birla believes that star performers need appreciation and recognition. It is very all important(predicate) for people who argon doing easily to be told they are doing well, he says.He insists that performance levels jump considerably higher after a several(prenominal)/team receives an award. The Aditya Birla award is for teams while the chairmans award is for individuals. A group company that has won numerous such awards is Hindalco. Birla has transformed Hindalco into a globally competitive non-ferrous metals company. The first step was to merge the copper family of Indo Gulf with Hindalco unifying the groups non-ferrous metals argument under whiz company with 40% commercialize share. He acquired 74. 6 % equity set apart up in Indal f or Rs 10 bn to make it a wholly owned subordinate of Hindalco.This made him the largest producer of atomic number 13 in India and today Hindalco-Indal command a 70% market share. Having made Hindalco competitive now Birla is pursuing market growth. He recently entered the Rs 2. 50 bn branded foil market. Within a year of launch Hindalco captured a 40% market share and put a robust distri onlyion in place. Last year Hindalco launched of as many as five branded products. The launch of Aura pervert Wheels in early 2002, uniquely mail serviceed as dress code for your car, was followed by the launch of its kitchen utility range Freshwrapp aluminium foil and Freshpakk semi-rigid containers, and Everlast cover sheets.Hindalco also introduced Al Planet, a unique exhibition format highlighting products from the secondary aluminium industry. For organic growth Birla has embarked on an Rs18 bn brownfield refinement at Hindalcos integrated complex in Renukoot to increase aluminum metal energy from 100,000 TPA to 342,000 TPA. This will ensure Hindalcos leadership position in the domestic market and improve its export markets as well. unless while Birla was revamping Hindalco, a move towards untangling the cross-holdings among group companies, a bequest of the licence raj, was also initiated.He unified his diverse companies under the Aditya Birla Group head. If ane were to encapsulate it (the group strategy) in a single banter the dominant strategic theme over the past four geezerhood has been consolidation, says Birla. The process was threefold. Birla rearranged the companies, consolidated market presence in the different industries and whence went on an erudition spree to further strengthen leadership position. The result is a streamlined group with all aluminium companies merged under Hindalco, cement companies under Grasim, copper companies under Birla Copper and textiles and garments under Indian Rayon.Losing some of its loss making divisions also made Indo Gulf a debt free fertilizer company. In the process the groups revenues sustain risen from Rs 72 bn to Rs 270 bn in eight eld. Our strategy dictates that we tick issue of businesses where we are bit players and strengthen the businesses where we have clear competencies, so that we get to the top of the league or consolidate our position there, as the human face may be. This leads to a sharper and tighter business portfolio with our firepower being better targeted, says Birla. Birla began with Grasim in 1995.His first step was to move the cement division of Indian Rayon to Grasim, thereby integrating the cement holdings within the group. Then in 2003 he acquired the cement division of Larsen & Toubro for Rs 22 bn increasing Grasims total capacity to 31 MTPY. Today Grasim is the largest producer of cement in India and the seventh largest in the world. Similarly the copper division of Indo Gulf was divested and incorporated into Birla Copper. Then Birla increase the smelte r capacity of Birla Copper from 100,00 to 150,00 MTPY and acquired two copper mines in Australia.Birla has been nicknamed the non-ferrous oecumenical by the industry his aluminium, copper, and carbon black units are ranked among the top three in their respective segments. Indian Rayon also proverb salient changes in portfolio. Its cement division was demerged. Then it acquired Madura Garments, the apparels and garments division of Madura Coats for Rs 2. 6 bn in January 2000. This takeover gave Indian Rayon ownership of prominent brands Louis Philippe, Van Heusen, Allen Solly, Byford, Peter England and San Frisco. This label a dramatic change in focus for the commodity based group.Though a major player in textiles, Birla had not been adequate to(p) to impact the branded menswear market. Building brands from scratch takes time as well as money, and the easiest way was to acquire an established one. The apparels business is one in which we want a leadership position. We will make a cerebrate entry into the high-value, ready-to-wear segment. This acquisition as well as the acquisition of certain overseas brand rights has catapulted the group to the top of the league in the branded apparels market, says Birla. Today after a long period of veto growth Madura Garments has reported a 14. % increase in revenues. As a part of the restructuring process he sold Mangalore Refinery and Petrochemicals to ONGC. The exit from MRPL indicates our firm go under to rationalized the Groups portfolio of businesses with a view on the future, and also bears attestation of our commitment to a key group of stakeholders our lenders, says Birla. The other major restructuring at Indian Rayon was demerging the insulator business into a new JV with Nipponese company NGK to sustain leadership position and to acquire a global marketing network for the insulator business.The consolidation initiative has allowed each company to emerge with a sounder balance sheet. The three largest c ompanies in the group, Grasim, Hindalco, Indian Rayon, moody in a cumulative net profit of Rs 10. 55 bn in FY03, a jump of 2. 1% from FY02. Their combined sales increased to Rs 110. 45 bn in FY03, an increase of 36% over the previous year. The groups overall revenues touched Rs 2,700 bn. Management style Birla is his fathers son, but he has gradually developed his own personal management style.Commonalities admit performance orientation, a strict eye for detail, close attention to budgets. Differences admit more informal interaction with managers from top to bottom a greater gap between personal and office life and a strong emphasis on financial performance. For example he has replaced the old Parta system, which focused only on production with the Cash Value Added method, which emphasizes profit world power, asset productiveness and growth. Birla is a firm believer in meritocracy. In his fathers time, there were several marwaris in top management. Today there are plenty of non-m arwaris.He places a lot of emphasis on HR and hired Santrupt Mishra from Hindustan Lever to spearhead the groups HR initiatives. A 360 degree feedback program that allows managers to question even Birlas own leadership style and does away with the baboo culture prevalent in the group. But while on one hand Birla nurtures employees, on the other he is very careful virtually performance measures. Birla is equally adamant about strict adherence to policies and procedures that have been discussed and approved. For example he introduced a retirement policy, similar to the one ratan Tata introduced over at the Tata Group.While a cresendo of unhappiness was heard at Bombay House, peaceful silence reigned at Industry House. At Lever House, no doubt Vindi Banga is closely watching these events. Birlas retirement policy saw 325 senior executives, between the ages of 62 and 65, step down after years of service. Though the policy was drafted in 2001, he took a year to implement. He then h ired 190 young executives to infuse fresh and out of the box thinking in the group. I think its been one of the around important decisions Ive had to make, says Birla.People skills are Birlas biggest strength. He has the ability to get on with both the old guard and the new turks. bonkers spoken and insistent Birla likes to be directly involved. For example he sends individual notes to employees regarding their performance. Debu Bhattacharya currently the managing director of Hindalco and another former Hindustan Lever employee says, it wont be an exaggeration to say that I matinged this group because of Mr Birla. For mortal who is from a highly respected MNC in the country, going to an Indian business house, I had a lot of reservations.My reservations came from that perception of the group. But I was so overawed with his simplicity, his genuineness, and his ability to explain simple things without trying to sell the job. If I had to take that decision all over again Id do the s ame. For all this Kumar is a low profile person, with a signified of humor and the rare ability to laugh at himself. This ease spills into his business relationships. For example the stalemate between the houses of Tata and Birla is now history. Ratan Tata recently invited Birla to join the board of Tata Steel, and Birla just as easily accepted.