I had no choice but to grow up fast: Kumar Mangalam Birla
...when my father died. At the age of 28, I had to run the businesses he had built.
Kumar Mangalam still vividly recalls the day his father, Aditya Vikram Birla, told him he had only a few more months to live. At first, the young Kumar Mangalam (he was 28 at this point) refused to believe him. After all, at 51 years of age, Aditya Vikram was at the prime of his life. He had successfully diversified the business group he had inherited into textiles, petrochemicals and telecommunications and was among the first Indian corporates to go international, taking the worth of the conglomerate to $2 billion in 1995. When he was diagnosed with prostate cancer in 1991, doctors had assured him that this was the least lethal of all cancers and had the slowest rate of progression. Around this time Aditya Vikram had decided that he had worked hard all his life, and that he now needed to spend more time with family. But it was not to be. Inexplicably, the cancer worsened and he spent the remaining part of his life in and out of hospitals.
Till that point, Kumar Mangalam recalls, his own life, especially his childhood, had been “secure, happy and uncomplicated”. The only son to his parents (sister Vasavadatta is younger), Kumar Mangalam grew up in a close-knit, joint family environment in Mumbai. Apart from his father, he was fortunate to have both his great grandfather, the venerable G.D. Birla, who was a close associate of Mahatma Gandhi, and his grandfather, B.K. Birla, to guide him as a child. By their own examples, says Kumar Mangalam, they inculcated in him the “values of honesty, consistency, integrity, hard work and putting your best foot forward in whatever one was doing”. Qualities that would stand him in good stead later in life.
As a youngster, Kumar Mangalam had no distractions or ambition of doing anything other than joining the family business, which he considered a privilege to do. He believed in the Hindu philosophy of the family you are born into being the purpose of your life. He always wanted to do “something big that also gave back to society”. When he returned after studying chartered accountancy and earning an MBA abroad, his father put him in charge of the smaller units in his company. Kumar Mangalam describes that experience as a “pressure cooker” environment (his father was always hard on himself and him) but in which he learnt a lot.
Just before he died, Aditya Vikram advised his son to run his businesses with the values he had taught him. “I know you work very hard, but you have to enjoy life,” Kumar Mangalam recalls his father telling him. “Life is meant to be enjoyed. Be very brave. Look after your mother and sister, and don’t grieve in public.” His father’s death and the resulting challenges he had to take up proved to be the turning point of his life. “It left me with no choice but to grow up fast,” says Kumar Mangalam. “It was a huge learning by itself. It taught me about the impermanence of life, to be resilient and to also appreciate the value of family and close friends that saw us through this very difficult phase.”
Among the first things Kumar Mangalam had to do was to run the conglomerate he had inherited. What helped him was the advice his great-grandfather G.D. Birla gave him, which was to be “your own person and take your own decisions”. So, when he took over, Kumar Mangalam didn’t feel the need of being like his father while running his business. As he puts it, “I had been ingrained with that freedom in my mind to create my own story, run it my way and make my own destiny, whatever it may be. I could reconstruct, repurpose and rebuild and not be afraid to make mistakes. In retrospect, that worked for me.”
In 1995, when Kumar Mangalam took over the family business, which he later renamed the Aditya Birla Group (ABG), the country had ushered in major economic reforms that had put an end to the stifling Licence Raj. The old ways of doing business, including the overdependence on government, had run their course. Kumar Mangalam had to revamp the company’s business strategy totally. Among the first things he did was to set about understanding what his companies needed by engaging with top management professionals.
Though he was advised to align his businesses and focus on pure play companies rather than diversified ones, Kumar Mangalam decided against it. He felt the group’s strength was its conglomerate structure. He told his team that he wanted to be a dominant player in any business the group was in; if not, then they needed to exit the sector. “First,” he says, “I told my team that we must be in the top 3 units in a sector and later in the top 2.” He sold units where he saw no prospects for acquiring dominance or loss-making ones, including the first spinning unit his father had set up. He also felt that ABG needed to rapidly expand its international footprint.
Meanwhile, he began making major changes in the way the group was being managed. Employment in the Birla Group at that point was like being in a large joint family with the children of employees almost assured of a job in the company. While Kumar Mangalam himself was 28, the average age of his employees was more than double his own. Among the first things he did was to introduce a system of meritocracy in employing people. That came from his firm belief that the main asset of any company was its people. He surrounded himself with managers who were not afraid to challenge him. He also felt it was important to lay down clear values on how the companies would be run and abide by them. Decentralised, empowered and people-driven organisation were key to success. For him, “it is very important to build leadership and a system that promotes merit, as institutions must outlive us.” Now 25 years later, all his decisions seem to have paid rich dividends. Today, ABG is a multinational conglomerate operating in 36 countries, with over 120,000 employees across diverse sectors that include textiles, cements, metals, chemicals, retail and telecommunications. It has annual revenue of $46 billion, more than 20 times what it was when he took over as chairman in 1995.
Work remains Kumar Mangalam’s prime passion; he is almost unidimensional in his approach. Success and money have made no difference to his worldview; he remains self-effacing, even modest, about his achievements. For him, acquiring personal wealth was never a priority. He says, “My personal needs are not many. The whole business of being a trusteeship of a company is very important to our family. Giving back to the shareholders and to society were values that were deeply ingrained.” Now that his businesses are well established and he has decentralised their running, he plans to spend more time with his three children and nurture their growth. His advice to them: “There is no substitute to hard work and that you must respect each person as an individual. I tell them it is all about integrity and commitment and being good human beings, that is what inspires trust. That this softer side of management is what matters the most.”
And other management tips? That life is a continuous process of learning; “the day you stop learning, you die.” He believes that “learning agility” or the quality to be able to learn fast, pick up new concepts, relearn and unlearn, are essential. Another is how you connect with people, how authentic you are. A third is to always keep an eye on the growth of your company and remain rooted in that reality. Finally, for him, the means are as important as the ends; there is no cutting corners or compromise on that. The big lesson from the pandemic? “For me, it is all about having deep pools of resilience.” It’s an attribute the 53-year-old Kumar Mangalam seems to have in plenty.