From: http://www.mckinsey.com/insights/asia-pacific/butter_chicken_at_birla
What succeeds at home may not work overseas. The chairman of Aditya Birla Group, Kumar Mangalam Birla, says Indian companies must be prepared to change long-held traditions if they are to thrive on the global stage.
December 2013 | byKumar Mangalam Birla
Mahatma Gandhi was killed in my great-grandfather’s home. Near the end of his life, India’s founding father used to stay at Birla House when he came to Delhi, and in January 1948 an assassin shot him point-blank as he walked out into the grassy courtyard where he held his daily prayer meetings. The house and garden are now a shrine and museum, visited by tens of thousands of admirers every year.
Growing up, I hardly needed to visit the memorial to be reminded of the values held by my close-knit Marwari family. Our tiny community, originally from Rajasthan, has had spectacular success in business, in part because we have maintained tight familial relations and traditional values—including many of those promoted by Gandhi himself. Marwari traders apprenticed their sons to other Marwari firms, loaned each other money, and insured one another’s goods, confident that their partners held to these same codes. To some in the West, our ways probably looked old-fashioned: when I took over the company, in 1996, at age 29, after the sudden death of my father, no meat was cooked in Birla cafeterias; no wine or whiskey was served at company functions.
Seven years later, we bought a small copper mine in Australia. The deal wasn’t a huge one, worth only about $12.5 million, but it presented me with a unique challenge of the sort I had not yet faced as chairman. Our newest employees were understandably worried about how life might change under Indian ownership. Would they have to give up their Foster’s and barbecues at company events? Of course not, we reassured them.
But then several of my Indian managers asked why they should have to go meatless at parties, if employees abroad did not. At Marwari business houses, including Birla, the top ranks of executives traditionally have been filled with other Marwaris. I had introduced some managers from other firms and other communities, and they had a valid point. I was genuinely flustered. My lieutenants were relentless: I had never faced a situation where my own people felt so strongly about something. Yet at the same time, I knew vegetarianism was a part of our values as a family and as a company. A core belief! I had broken a lot of family norms, but I thought this one was going to be multidimensionally disastrous for me.
Fortunately, my grandparents merely laughed when I approached them with my dilemma: they understood better than I did that our company had to change with the times. If we wanted to make our mark on the world, we had to be prepared for the world to leave its mark on us.
The Aditya Birla Group is now one of India’s most globalized conglomerates. We have operations in 36 countries on five continents and employ 136,000 people around the world. Over 60 percent of our revenues come from overseas.
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Some lessons surprised me even more. Ironically, before we became more international, I used to be much more impressed by someone who could speak the Queen’s English than, say, by a chartered accountant from Jodhpur whose spoken English required some effort to understand. Now when I look across all our operations in places like Brazil or Egypt or Thailand, I see a whole host of people who aren’t comfortable in English, who need interpreters, but who are very, very good at what they do. Sadly, it took that experience for me to respect an accountant from Rajasthan—my home state—as much as a graduate of St. Stephen’s in Delhi. At one time, we even wanted to run English classes for some of our employees! Now it’s not an issue in my mind. If you can get your point across, if you are adding value, if you are competent, then bloody hell to your English.
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The good news is that globalization gets easier over time: there is a snowball effect. The next time we bought a pulp mill in Canada, we were known. The New Brunswick government was comfortable with us; the mill workers knew who we were. Interestingly, as we become more global, people have real feedback to fall back on. When we acquired Columbian Chemicals, in 2011, executives at Columbian headquarters in Atlanta were able to go across town to the Novelis headquarters and ask about us—what we were all about, how we’re run, what sort of autonomy we encouraged. They were talking to people to whom they could relate easily and who could give them honest and accurate information. Maybe not all of it was positive, of course, but at least it was real.
Now, when we want to recruit expat talent to move to India, it’s much easier as well because they know about our global operations. They know that opportunities across the group are getting bigger and more interesting. That’s made us a more attractive employer to non-Indians. As we are “going global,” we’re also finding that global executives are becoming more willing to “go Indian.”
As I’ve said, this has taken years of painstaking work. It’s not an overnight process, and it’s not as easy as writing a check. There are opportunities out there for ambitious and well-run Indian companies—as long as they remember that the world will change them as much as they hope to change the world.
About the author
Kumar Mangalam Birla is chairman of the Aditya Birla Group. This essay is excerpted fromReimagining India: Unlocking the Potential of Asia’s Next Superpower. Copyright © 2013 by McKinsey & Company. Published by Simon & Schuster, Inc. Reprinted by permission. All rights reserved.
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