Anand Mahindra - M&M

Passionate innovator

• I call myself a “right brained person.”
• The whole feeling in this company has been one of trusteeship.
• Innovators are non-conformists. Innovators and entrepreneurs are those
• who have immense confidence in their capabilities.
• If educated properly, Indians are second to none in the world.
• I worry when times are good.
• It’s never only about the money, it can’t be. Otherwise I don’t think you can get outstanding results.

You don’t find a Harvard graduate who earned a summa cum laude (Latin for “with highest honour”) in film, heading one of India’s largest auto businesses. A self-confessed ‘right-brained person, Anand Mahindra believes this honour from Harvard was a cathartic experience and marked the end of his rebellion. It also proved to sceptics that he could establish himself in a field where his family was not present, rather than walking the easier path of joining and running an inherited family business. Anand, also a Communist party member in his college days, firmly believes that innovation and creativity are mindsets and one needs to constantly question one’s direction in life – something he says he doesn’t see in today’s youth, who he believes are focused and know what they want from day one. Anand began his career in a group company – Mahindra Ugine Steel (MUSCO) – taking it through the stormy early-eighties negotiating with labour unions in the steel business, a period he calls a “trial by fire”. Anand eventually joined M&M in 1991, and became the Managing Director in 1997. He has a strong sense of pride in the work he does, and believes given the right education Indians are second to none in the world. Not surprisingly, the Scorpio remains Anand’s biggest achievement. Or, as he puts it, “The scale of risk we took is our biggest achievement”. The Scorpio, interestingly enough was born, not as a specific SUV project, but as an idea from a 26-year-old engineer who was part of a team building a 13-seater Utility Vehicle. The imposing Rs6bn budget for developing the Scorpio was a huge risk to take and a hurdle to cross. Anand took the bet, convincing the Board that it was the way forward. The rest, of course is history. Anand cites driving innovation across M&M and the entire Mahindra Group as another key achievement. His idea of setting up unique world class complexes ("World Cities") that holistically integrate the needs of work and family is a case in point. Despite opposition from the board (“For five years people thought I was mad”), Anand held his stance that “We’re changing the way people live in these townships.” Sure enough, Mahindra Gesco (the holding company) currently has orders worth Rs15bn and takers like Infosys for it’s Mahindra World City, Chennai project. Background Anand Mahindra, 50, was schooled at the Lawrence school in Lovedale. He completed his graduate studies at Harvard College in Arts, following it up with an MBA from Harvard Business School. His paternal uncle, Keshub Mahindra, is the current chairman of the company. Anand has two daughters.
The fact that the Mahindra Group consists of a myriad of companies seems to question the entire concept of focus. However, Anand believes that he already “chopped the deadwood” in 1994 (exiting businesses like nuclear engineering, oil drilling, etc) and set six areas as key focus businesses for the group. Each of these groups has to meet “the bluechip criteria,” which means the business must: (a) be a leader in its industry; (b) have innovation as a key model; (c) have global potential; and (d) deliver on demanding financial goals. With Anand removing himself from active management (“kicking myself upstairs”), all the businesses were given dedicated presidents to provide managerial focus. He believes giving managerial and financial independence to these businesses is what sets them apart from the conventional conglomerate structure that tends to focus on top-management control. Anand is now moving forward to list each of these businesses, which are as diverse as Mahindra-British Telecom (IT), Club Mahindra (time-share holidays) and M&M Financial Services. “All of these will be IPOed and will therefore become independent.” At the same time, Anand also resisted pressure to carve out M&M’s auto business into a separate company. “If we do it right, I have a better chance of turning Mahindra as a globally recognised cult brand, than I do, trying to turn it into General Motors.” Anand sees M&M as a three-cylinder engine, consisting of UVs, tractors and components. He is focusing on building M&M as an “auto competency group” by creating verticals sharing the same platforms such as logistics, procurement and engineering. His philosophy for M&M is “When you build more verticals you simulate the scale and get a larger company without losing the niche focus.” With the recent tie-ups with Renault and International Trucks, Anand believes he has now created a “fivecylinder engine”. Benefits for M&M’s core auto business are already flowing in – for example M&M is now tapping into Renault’s global procurement systems. Anand has clear targets for each of M&M’s three cylinders. UVs – to be a globally recognised brand, tractors – to be a dominant player, and auto components – to be the largest automotive component conglomerate in India (“We’d like to be a Dana, Spicer or a Lear.”). Similarly, for the group Anand doesn’t believe in one single goal. He chooses, instead to focus on leadership, innovation, a global presence and delivering on the financials. Everything else, including size, which he believes doesn’t matter, will then follow.