Values, people and cash generation key anchors in business, says Birla at HTLS
Birla also highlighted the group’s commitment to education through institutions like BITS Pilani, linking it to his personal experience of early adversity.
Strong values that focus on people, long-term vision, working in scale, and right economics that generates cash — these are core principles that have driven the $65 billion Aditya Birla Group’s success, the conglomerate’s chief Kumar Mangalam Birla said on Saturday.
In a conversation with HT’s editor-in-chief R Sukumar during the 22nd Hindustan Times Leadership Summit, Birla outlined the mantras of longevity that have sustained a group that has been in business since the late 19th century.
“A company is not just a repository [of wealth] — it’s much more than that. It’s a repository of people’s trust, the trust of shareholders, customers, suppliers. So, I think trust and values are very important,” said Birla.
Birla, who took the reins of the company at the age of 28, touched upon a number of crucial cultural anchors, including the “socioeconomic concept” embraced by his grandfather GD Birla that emphasised on companies being “not just emblems of capitalism but also institutions of collective prosperity”, and a fundamental “no short-cuts” principle that he said he learnt from his previous generation and passes on to his children.
But to summarise the most crucial aspects of the business culture, Birla cited four main anchors: values, people, scale, thinking long-term, unit economics and cash generation.
“We truly are a people’s organisation. It is about how you treat people – they know they are empowered, accountable and they know we invest in them,” he said, adding that there are more than 4,000 people who have been part of the organisation for more than 20 years.
On scale, he said it would be “very difficult to survive today” without it. He cited the example of how the conglomerate’s cement business has grown: “We built our cement business 100 million tonnes in 36 years, in the next five years we got to 150 million tonnes. In another five years, we’ll get to 200 million tonnes”.
To illustrate his point about long-term thinking, he cited his company’s 2007 acquisition of Novelis for $6 billion, a deal that many today see as one of the most ambitious successes of India Inc on a global scale.
“The stock took a beating. People wrote us off. Any professional CEO at the time would have been sacked because it then seemed to be the wrong thing to do. But I think as a promoter, I had the prerogative to see much beyond not just quarters but years,” he said.
At the end of the day, he added, businesses need the right economics: “Businesses need to have the right economics at the unit level and they need to generate cash. That’s how you grow. That probably would be the culture that would define us.”
Discussing future strategy, Birla acknowledged the changing business landscape has shortened planning horizons from 15-20 years to about 10 years. However, he maintained that manufacturing investments still require 15-20-year perspectives, while consumer businesses operate on shorter time frames.
Consequently, it is the phase of a country’s growth curve that determines which business one wants to get into, Birla explained. “When we started financial services [in 2007], it was a nation coming of age… the average person was becoming more aware about his or her savings and was becoming more financially literate,” he said.
The group has recently expanded into consumer-oriented sectors including paints and jewellery retail, leveraging existing strengths like distribution networks.
Birla noted these moves reflect India’s growing consumer aspirations and the group’s confidence in approaching retail markets.
“What we’ve learned in financial services, in some of our retail formats has given us more confidence to come closer to the customer,” Birla said.
On avoiding controversy, Birla emphasised a focus on “running our own race” rather than watching competitors. “Controversies take a lot of time and energy,” he said, attributing the group’s steady reputation to this approach.
Birla also highlighted the group’s commitment to education through institutions like BITS Pilani, linking it to his personal experience of early adversity. “The transformative role of education is something you can’t deny,” he said.
Looking ahead, while expressing uncertainty about specific predictions, Birla was confident about India becoming “a much more consequential economy” and highlighted digital transformation as a key future trend.