“From humble beginnings to a global presence, our journey has been for more than 65 years in the making”
Anand Mahindra is an enthusiastic, dynamic, distinct, intellectual and eloquent business leader, who articulates well with the changing trends of business. He began as a leader in 1991 at the age of 36 and took up variant responsibilities to strengthen and stabilize the company’s long-term existence. He took up the helm as Managing Director of Mahindra Group, which has a glorious history of 65 years, a global conglomerate and the top 10 industrial houses in India, in 1997 and an additional responsibility as Vice-Chairman in 2003.
At the time when Anand took the helm, the group was stuck in losses, and it was a company known for manufacturing tractors and selling jeeps, with annual revenue of $2bn. For the outside world, Anand was a person who took up an inherited business empire, to have a tight hold and elicit revenues out of it. However, on the contrary Anand proved his skeptics wrong. He charged in, to change the company, by cumbersome restructuring. He implemented initiatives like, bonuses of workers were dependent on their performance, which improved their efficiency. These changes brought about by Anand Mahindra made investors rely on shares of Mahindra & Mahindra and M&M drew the attention of investors in capital markets on long-term basis. The Financial disclosure policy of the company has won accolades from the financial analysts and the complete credit goes to Anand Mahindra.Under the visionary and strong leadership of Anand Mahindra for two decades, the company is expanded, diversified, reorganized and clearly demarcated into six sectors; automotive, farm equipment, infrastructure, financial services, information technology outsourcing and engineering design. He took main lead in transforming the company from a jeep and truck-producing firm to a multi-national entity with Utility Vehicles (UVs) Multi Utility Vehicles (MUVs), Sports Utility Vehicles (SUVs). He steered the company from a small local enterprise to a giant global leader with revenue of around $12.5 billion and employing more than 119,900 people around the globe. The agriculture-to-aerospace conglomerate turned a profit of nearly $700 million on revenue of $8.7 billion, in fiscal year 2011. The automotive and farm sectors contribute at about 36 percent and 28 percent respectively. The company headed by strategic moves of Anand Mahindra and his close supervision, since two decades, M&M has been an out performer over the last decade. The first half of 2001-2005 saw a compounded annual growth of 25 percent in revenues and 118 percent in profits. The second half of the decade saw a consistent and brisk growth at rate of 26 percent, with profits growing at 29 percent. The growth was reflected in its share price, which grew 60 times by 2010.
As Anand strongly believes that, “The zero-sum game is no longer valid in the world of business. Companies must learn to collaborate with all the stakeholders in the society and earn returns through the trust they build with them”. He promises that the company will continue to pursue innovative ideas that enable people (stakeholders) to rise. Currently he undertook lot of acquisitions, with main aim of spreading global footprint. Anand Mahindra became role model for the growing entrepreneurs, by his great achievements in the global arena of business, facing the intrinsic competition.
After completing his business studies from Harvard in 1981, Anand Mahindra returned to India with sufficient knowledge to handle the business. The year 1989 was a beginning point of his career, as President and Deputy Managing director of Ungine Steel Company also known as MUSCO. At this time, Mahindra started diversifying the business into new areas of real estate development and hospitality. He rose through different levels of the company and had an overall insight of the company. In the year 1991, he held the responsibility of Deputy Managing Director of Mahindra and Mahindra Ltd and in 1997 he became the Managing Director of the company. In the year 2003, apart from being a Managing Director of the company, he also took the additional responsibility as Vice Chairman. He also played a role as co-promoter of Kotak Mahindra Finance Ltd, converted into private sector bank in the year 2003.
After Anand Mahindra took up the reins of the company he restructured the company, increased the productivity of the workers from 50% to 150%. He expanded the company from makers of tractors and jeeps, today the company is a global player and strongly positioned in all the businesses in its portfolio such as; automotive, farm equipment, infrastructure, financial services, information technology outsourcing, engineering design, holiday resorts and defense.
In 1995 the firm was desperate to tie up with a multinationals, for enhancement of technological and management skills and finally made a partnership deal with Ford motors. The partnership was dissolved with the release of Escort, the first car, which was a flop. Later two other partnerships failed for Mahindra, The partnership with US-based Navistar International that reported losses of 186 Crore and Logan was a major flop, a mid-size sedan that is the offspring of its venture with France's Renault.
After learning lessons in manufacturing top-class vehicles, with the major setbacks experienced in the previous ventures, M&M was all set to manufacture Scorpio. The dream of Scorpio was not possible without the joint venture with Ford Escort. The 300 people who put the Ford Escort together were the first ones to work on the Scorpio. Anand Mahindra knew well that he needed right people to realize the Scorpio project. Therefore, he turned to Pawan Goenka to develop a vehicle from scratch in India, an expert in engine technologies, worked as general manager in R&D for GE, and was at verge of leaving the company in 1993. Goenka spent the following years in learning automotive technology to greater extent and building a team of skilled young engineers. Finally, Scorpio, the first SUV for the global market was launched in 2002, with total project cost of Rs 550 Crore. Scorpio created a history of success to Anand Mahindra and stood one of the greatest achievements of the company. Scorpio also served as a platform, first for the Xylo in 2009 and then for the XUV5OO, to be launched in India and South Africa by the end of this year.
He also launched the highly appreciated UV Bolero. M&M’s Automotive Sector makes a wide range of vehicles including MUV’s, LCV’s and three- wheelers. M&M is the largest manufacturer of MUVs, offering over 20 models. The company is presently a market leader in the UV segment.
The Major growth of Mahindra came from a series of acquisitions made by the company in the past few years, starting from 2007. The acquisitions include Punjab Tractors, Kinetic Motors, British Telecom, Satyam Computer Services, Reva Electric Car Co, Ssangyong Motor Co and Gipps Aero etc.
In July 2007, M&M purchased 64.6% of Punjab tractors and turned it around within short span of two years. The company sold around 202,000 tractors a year and stood third in the world. M&M captured 42% of India’s tractor market. Farm equipment is single largest contributor of M&M revenues.
In 2008 M&M, purchased 80% stake in Kinetic Motor’s two- wheeler business for Rs 110 Crore, and run it as a separate entity Mahindra two-wheelers. The company captured 7.6% of scooters market in for the year 2010-2011, nearly 3% higher than the previous year.
The information technology business of M&M began as a venture with British Telecom in the year 2009. The company derives more than 60% of its revenues from British Telecom, and owns a 31% stake in the company. In June 2009, the company purchased Satyam Computer Services for Rs 2,650 Crore and re-branded it as Mahindra-Satyam, to own a stake of 51%.The new company for the first time declares consolidated profit of Rs 225.2 Crore for Apr-June of year 2010-2011. Satyam will certainly help the company to diversify into other verticals. In May2010 M&M purchases a stake of 55.2% in Reva Electric Car Co. Mahindra –Reva reported losses of Rs 28 Crore for the year 2010-2011, but Goenka feels that it would be beneficial on long run. Mahindra-Reva plans to launch new vehicle, NXR at the earliest.
In November 2010, M&M acquires 70% stake in Ssangyong Motor Co. for about Rs 2,100 Crore, in South Korea. Ssangyong’s marketing and distribution reaches Russia, Latin America and Western Europe, yielding scope to be a global major. This is the largest outbound deal and M&M plans to introduce Ssangyong vehicles in India by 2012.
Mahindra Systech has been acquiring automotive component and aerospace companies aggressively since 2003. In 2008, Systech, the components arm of Mahindra Group, bought Australia based Gipps Aero.
The career of Anand Mahindra shows the renewed strategies he implemented to reach his goals. He diverted his enormous efforts for the growth of the company. This is possible only by deep learning and insight into various aspects of business, a perfect planning and a thorough perception of business arena globally. Failures do not stop a leader from achieving his objectives; in fact failures become lessons for success.
More about Anand Mahindra
Born 1 May 1955 (age 56)
Mumbai, Maharashtra, India
Residence Mumbai, Maharashtra, India
Alma mater Harvard University
Occupation Vice-Chairman, Managing Director of Mahindra
Marital Status Married
Children Two Daughters
Anand Mahindra the dynamic businessman of India, was born on first May, 1955 in Mumbai, his hometown. He entered Harvard as an undergraduate in the film studies programme of the Department of Visual and Environmental Studies. He graduated from Harvard College, Cambridge, Massachusetts. He completed his MBA from Harvard Business School, Boston, Massachusetts in 1981 and returned to India to manage business. Right now, he lives in his hometown Mumbai, with his wife and two daughters.
Anand got married to Anuradha Mahindra, who worked in advertising and as a freelance journalist for almost 12 years. She started the magazines 'Verve' and 'Man's World' with a desire to showcase the best of Indian talent in writing, fashion, interiors and photography. She is also the editor-in-chief of Rolling Stone India. They had two daughters.
Anand Mahindra is a big fan of football and has a keen interest in football. He likes world of cinema, reading, tennis and sailing. His interests include photography. He is a poise personality, speaks eloquently, and is a frequent contributor to debates on business issues and government policy. The great industrialist Anand Mahindra has given Harvard University $10 million; the largest gift for the study of humanities in its history, the centre is now renamed as Mahindra Humanities Centre. This shows his stint towards Harvard and his Harvard connections.
Awards and Accolades
Anand Mahindra received a number of awards as a tribute of recognition for his exceptional business acumen. He embedded a culture of innovation and improvement and communicated a clear strategic vision companywide to deliver outstanding commercial performance over years. His contribution to technical and intellectual world is worth rewarding. Few of the awards he received are mentioned below:
Mr. Mahindra received the Business Leader of the Year Award, at The Asian Awards 2011 held in London on October 18, 2011.
CNBC TV18 has given him the honor, as the Outstanding Business Leader for 2009.
He was named Business Leader of the Year by the “Economic Times Awards” 2008-2009.
The Most Inspiring Corporate Leader of the Year 2007, from NDTV Profit.
He bagged the CNBC Asia Business Leader Award for the year 2006.
He was recognized as the Person of the Year 2005, from Auto Monitor.
Anand Mahindra received 2005 Leadership Award from the American India Foundation for his, and the Mahindra Group's commitment to corporate social responsibility.
He received Rajiv Gandhi Award 2004, for outstanding contribution in the business field.
The President of the French Republic honored him with the ‘Knight of the Order of Merit'.
Conscious Capitalism by Anand Mahindra
Anand Mahindra puts out his mind in an article for Forbes magazine. In 25 ideas to change the world Anand Mahindra speaks about “Conscious Capitalism” which is a fresh idea in business world. He says that the relation between the business, society and stakeholders of the business should be complementary to each other and all of them should grow with belief and trust.
In his article about Conscious Capitalism, he tells that the new mantra of success in business is collaboration with the society and stakeholders and returns should be earned by building trust with them. An idea would change the world, may the idea be implemented in the form of a product, device or a gadget (like in the case of Apple first iPads). The outcomes of strong, powerful and abstract ideas cannot be easily forgot; these ideas change our outlook on the world and our role in it. Sometimes a new disruptive idea may emerge from the previous venerated ideas. The ideas need not always take moral grounds; sometimes they may be more practical.
In this globalized model of business, finite resources and fierce competition; there raised an urgency for the businesses to change and move to a more collaborative approach. The zero-sum approach to competitors and a "hunter-gatherer" interface with the environment is no longer sustainable. Collaboration with our wider communities is not just one more way to build a brand, gain subsidies or win favor of customers; it is the ONLY way to do business. Gaining the trust of customers is more crucial for success in business, that is what Anand Mahindra was conveying to the business world through his article. Of course, the need for enhanced shareholder returns and a healthy bottom line is not just what shareholders require, it is a resource enabler for all other good things. We are in the 21st century, the world of commerce and finance and simply involving in a set of community activities may not be a tool for enhancing shareholders returns. This needs an altogether new approach. Our integration with the local and wider communities would give positive results, only if our work helps the fortunes of our entire stakeholders rise along with us.
Rise –The new Branding initiative of Mahindra
The Managing Director of M&M, Anand Mahindra says 'Rise', is the group's new brand positioning initiative, unveiled recently after a year long brainstorming exercise and visiting several countries where the group operates before taking the final decision. The initiative was formulated by UK-based agency Strawberry Frog, chosen as the word cuts across cultures and countries. It is an effort by M&M to become 'tomorrow's company'. The repositioning reflects a fundamental change in corporate strategy; it will be a challenge to see how the aspiration 'Rise' is translated into action. It is very difficult to implement the change in strategy at the grass-root level.
The outcome of this initiative is approximately expected to be Rs 320 billion. Anand Mahindra says that “Rise” would be bigger milestone than the launch of Scorpio, the group’s top-selling sports utility vehicle, launched in 2002. He also says that in the mere future, the reason why people work for Mahindra or buy its products would change. He adds that it is a great message to corporate India and that the enthusiasm could be infectious and many more Indian business firms would adopt this approach to communicate their core purpose of business.
The M&M group is ready to spend Rs 120 Crore, to promote the “Rise” program in the next three years. The main aim of the program is to outperform the competition and achieve growth of 10X, which means growth may be in the form of 10 times revenues, 10 times profit or 10 times market share. Mahindra’s are aware of the fact that just an aesthetic change in terms of brand logo, tagline etc. can never help a brand unless the change is strongly inculcated internally and even employees should promote and recommend Mahindra’s products to the customers. M&M top brass would be hoping employees and customers would indeed 'Rise' to the occasion.
There are enough reasons why the Mahindra group went in for a rebranding now. In a somewhat similar exercise 13 years ago, the group had articulated its core purpose, as “Indians are second to none today, with 10 per cent of Mahindra's strong workforce being foreign nationals, the group needed to brand itself”. “We found that it resonated with people everywhere. Everyone has the aspiration to rise above their lot," That was important as the group now has a presence in 79 countries across the globe. The federation of companies that make up the group include an Australian aerospace company and South Korean automaker Ssangyong Motor Company, which Mahindra acquired last year. Our strategy management office then got into the act to find out a more relevant core purpose so that everyone in Mahindra speaks in one voice. As Indian companies go global, it is important for them to recast their intrinsic framework - who they are? What they believe in? What businesses are they in?
"If someone walks into a Mahindra showroom, they should actually feel the change”. While expectations have been set, success will also depend on how well the brand promise is delivered. One has to evaluate how the corporation will live up to the positioning.
Few promising quotes by Anand Mahindra
"We continue to build our business portfolio at a measured pace, despite low discretionary spend in the telecom vertical. This has been enabled by our diversification into new geographies and customers" - Anand Mahindra "The profit for the quarter ended June 31, 2011 and 2010 are not comparable as the figures in respect of June 2010, do not include share in profits of the associate (Satyam) as the financial results of the associate were not available when Tech Mahindra accounts for June 2010 were prepared" - Anand Mahindra "I do not see the dollar's role as a reserve currency under threat, since a reserve currency is characterized not just by fiscal strength, but also by the political and economic freedom of the host country. Yes, the rupee may accelerate and exports could face headwinds, but at a time of high inflation, a strong rupee is the lesser of two evils" - Anand Mahindra "If there was a trust deficit, it was dispelled today... it vanished today. There was an assurance on time bound action on our proposals" - Anand Mahindra