Anand Mahindra: Allweather entrepreneur who knew how to...
Anand Mahindra was born on May 1, 1955, in Mumbai, India. After completing his early schooling, he joined the Harvard University and graduated in 1977. In 1981, he completed his MBA from the Harvard Business School.
In the same year, he joined Mahindra Ugine Steel Company Ltd (MUSCO) – a subsidiary of Mahindra & Mahindra – as an Executive Assistant to Finance Director. In 1989, he was appointed as President and Deputy Managing Director of MUSCO.
On April 4, 1991, he took the role of Deputy Managing Director of Mahindra & Mahindra Ltd.
Mahindra & Mahindra has an interesting background story. The grandfather of Anand co-founded a steel trading company known as ‘Mahindra & Mohammad’ in 1945 with his brother and a friend, Ghulam Mohammad. Following the independence of India in 1947, Mohammad left the company to become the first Finance Minister of Pakistan and the two brothers renamed their company Mahindra & Mahindra.
Their steel company moved away from trading to manufacturing by acquiring the licence to assemble the Willys Jeep for the Indian market. In 1963, the company also entered into a joint venture with International Harvester to form International Tractor Company of India but the partnership came to an end in 1971.
At the beginning of the 1990s, the Indian government decided to liberalise the economy due to the balance of payments crisis. A number of measures were introduced, including the opening up of India to overseas trade and investment, privatisation, deregulation measures and tax reforms.
With these changes, Mahindra decided that the family group had to redefine its work culture or be left behind as the country faced new international competition. He announced that the bonuses traditionally given at the time of the autumn festival of Diwali would be linked to productivity. The workforce demonstrated. Mahindra went out to talk to the workforce. He explained that there were going to be no more free lunches and whether they like it or not, change was going to happen.
Change did happen. Under the old workload system, a workforce of over 1,200 produced the agreed 70 engines per day. By 1994, 760 workers could produce 125 engines per day.
Mahindra set out to globalise the company, competing with the world’s major automotive manufacturers. In 1995, the company joined a 50/50 venture with Ford Motor Company to create Mahindra Ford India Ltd. The venture was not a complete success: the first product, the Ford Escort, sold poorly and was discontinued after five years. Mahindra gave over control of the venture to Ford, which increased its share of the venture in 1998 to 72 percent and renamed the company Ford India Private Ltd. Mahindra saw the exercise as an invaluable learning curve in modern motor manufacture.
He conceived an ambitious project to manufacture its own sports utility vehicle (SUV) in India and launch it onto the global market.
Using its strengths in vehicle assembly, the company contracted with suppliers to design, manufacture test and supply the major components of the car to given specifications. The Scorpio was brought to market at a total cost of US $ 120 million, perhaps one-fifth of what a US manufacturer would expect to invest in a new vehicle. It became one of India’s leading SUVS and was exported around the world.
Mahindra embarked on a series of acquisitions and mergers. In 2007, Mahindra & Mahindra merged with Punjab Tractors, doubling its share of the India tractor market and becoming a leading global player. Mahindra Tractors is the world’s largest tractor company selling tractors in India, China and the US.
In 2010, Mahindra bought a 70 percent stake in South Korea’s Ssangyong Motor Company, giving the company access to distribution networks in Latin America, Europe and Russia. The group also makes cars, an electric car, motorcycles, scooters, trucks, yachts and aircraft.
In August 2012, he took on the role of Chairman of the board and Managing Director of the Mahindra group. Since then, Mahindra & Mahindra has invested in businesses such as hospitality, defence, information technology and electric vehicles, while exiting others (oil drilling and instrumentation), though it’s only in the last five years that the venture capitalist-type bets have gained momentum. Mahindra believes that for a traditional Indian business family, this represents evolution.
At Mahindra Systech, it makes auto components across five continents. Tech Mahindra is the fifth largest IT services and IT consulting company in India. Mahindra Retail (Mom & Me) sells products for expecting mothers and babies. More than 1,60,000 Indians choose to take a break with Mahindra Holidays and Clubs every year.
Mahindra Agriculture is the country’s largest exporter of grapes and pomegranate. With a market capitalisation of Rs.15,000 crore, Mahindra Finance is the largest nonbanking finance company in rural India. Mahindra Solar is making inroads in solar farms. Mahindra Logistics is a Rs.1,400 crore business already
Today, the Mahindra Group is a US $ 16.2 billion organisation and one of India’s top 10 industrial houses.
What lessons can we learn from Anand Mahindra’s story 1. Learn to resolve peacefully
In most of the situations in life, you will have to remain calm and stable minded, that is precisely you can learn how Mahindra managed once a shutdown protest by workers. He usually remains adhered to his terms and refuses to encourage lethargy, unproductiveness in his company.
2. Inculcate perseverance
Mahindra’s never-settle spirit always led Mahindra to grow into one of the India’s largest conglomerates. The transformation from pre-independence era companies to market leader in the competitive era is nothing more than astonishing in India. He faced all the issues from the Licence Raj to liberalization but his perseverance is exceptional.
3. Always think big
Mahindra always had the vision to make it happen, the power of controlling, channelizing and utilizing the thoughts is incomparable. This man had the courage to dare and dream big. He took consistent steps to catapult Mahindra & Mahindra into the big league.
4. Keep learning
Anand Mahindra has connected directly to everyone on social media that make him actually one of the most agile technology-driven business persons in the country. He refuses to bend down to what seemingly looks scary, be it technology or competitors.
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He learns the newer and better ways to mow them down. He no more belongs to an old school of corporate honchos. He is the champion of business in India.
Evolve
Mahindra has evolved into a socially and environmentally responsible global federation of companies with a leading presence in each sector in which it is present. Being open to new changes is extremely important for one’s growth. And no one epitomizes this more than Anand Mahindra. Even though he is one of the old schools of corporate honchos, Mahindra is active on social media, which means he is successfully making a connection with the younger generation seamlessly and knows the pulse of the consumer.
Determination
Being one of the pre-independence era companies, Anand Mahindra had the Herculean task of growing the company at a time when India had to undergo a major change in its economy. The Licence Raj came to an end in 1991 and the market opened up to foreign players. It was Mahindra’s sheer determination that helped this homegrown company to grow into one of the largest conglomerates in the country.
But the most interesting lesson to be learned is included in his following comment.
“My aspiration is that Mahindra & Mahindra become one of the most customer-centric organisations in the world. If we focus on understanding our customers, we will be able to develop customer-centric innovations.”
- Anand Mahindra, Harvard Business Review (Lionel Wijesiri is a retired company director with over 30 years’ experience in senior business management. Presently he is a freelance journalist and could be contacted on lawije@gmail.com)