The Boss

Anand Mahindra

The Mahindra & Mahindra chairman is a self-effacing tycoon who lets his A-team have the final say

It was sometime in October 1990. An eclectic mix of guests had gathered at the late LM Thapar’s house to celebrate his 60th birthday. Hemant Luthra, the-then COO and CFO of Ballarpur Industries, and his wife chose to gift Thapar a present wrapped in The Pioneer, which the latter had just relaunched in Delhi. As the evening progressed, the late Vinod Mehta, the recently hired editor of the newspaper, stood up and raised a memorable toast to Thapar: “I have been hired and fired many times… and am told that all bosses are SOBs. But it seems to me that LMT [Thapar] is the best SOB that I have ever known.” The toast brought the house down. 

Sometime after joining the Mahindra group in 2001, Luthra narrated the episode to Anand Mahindra at the farewell of a respected company veteran. There was an awkward silence at first, but Mahindra — forever a good sport — had a good laugh. That night, when Luthra got home and narrated the incident to his wife, she was furious. “You worked with LM Thapar for 18 years; you have been here for just three months. Are you completely crazy?”

Her reaction worried Luthra, who immediately sent a mail to Mahindra to make amends. “Anand… apologies… I took some liberty and poetic license with the SOB story. It was only meant as a compliment to reflect the spirit of freedom that has made M&M fun in just three months. No offence meant and, I hope, none taken.” In a flash, at what was well past midnight, Mahindra replied: “Hemant, I must be a bigger SOB than anyone thinks if I could take offence at what you said!”

Hemant Luthra, chairman, Mahindra CIEThat self-effacing email proved to be a defining moment for Luthra, whose respect for Anand Mahindra has only grown in the 15 years that he has been with the group. Sitting at Mahindra Towers, the group’s corporate office in the Worli locality of central Mumbai, the chairman of Mahindra CIE Automotive — earlier called Mahindra Systech — says, “I have had terrific bosses at IBM and Ballarpur, but what sets Anand apart is that he is an amazing human being.” 

This observation about the Harvard-educated Mahindra is seconded by CP Gurnani, CEO and MD of Tech Mahindra. “My first interaction with him was in early 2004, and what struck me was that he was clearly a business magnate, but of a rare kind. The first time I met him was at Indigo in Mumbai — instead of interviewing me, he chose to take me out for dinner.

What intrigued me was that he was one of the few Indian businessmen that I have ever seen drive their own car — in his case, the Scorpio. Our dinner was not much like an interview either, but more about two people getting to know each other,” says Gurnani, sitting in his plush home in Noida.

Mahindra’s personal connect is something that even SP Shukla cherishes. “With Anand, it’s not about just ticking the boxes. Whenever he meets a person, Anand has a genuine interest in getting to know him. In my second meeting itself over lunch a few years ago, I sensed his natural ability to put a person completely at ease. By the time we finished lunch, I knew that he will be the person I would be working with till I retire from the corporate sector and, in a way, that day, I selected my boss. When people later asked me about joining the group, I simply said that I was actually joining Anand and, therefore, the Mahindra group,” explains the president for aerospace and defence, who is also on the group’s executive board.

Bharat Doshi, former CFO, M&MAnd it’s not just the top leaders in the group who hold Mahindra in high esteem — 32-year-old executive assistant Shantanu Rege, too, finds Mahindra an authentic leader. Rege, who graduated from IIT Bombay in 2006, worked at management consulting firm McKinsey in India for a couple of years, followed by a two-year stint at PE major Blackstone, before quitting to do his MBA from Harvard Business School. 

“I was a bit confused about what I wanted to do. I started writing to several Indian business leaders, all of whom I respected for making money the right way. Most were kind enough to reply, but the trail turned cold once the mail was forwarded to the HR team.” Rege was surprised to receive a mail directly from Mahindra instead. “If you are in Mumbai anytime soon, drop by,” it read.

It was in January 2012 that Rege walked into Mahindra’s office and, as courtesy demands, said, “Mr Mahindra, thanks for taking time out to meet me.” “I remember his first words,” Rege recalls, “He said, ‘You will call me Anand and I will call you Shantanu, or else the meeting is not happening.’” Already impressed, Rege was bowled over by Mahindra’s candid nature, which also came through in the subsequent half-hour conversation. “Here was a cool boss who did not ask me about my grades or anything related to academics. Instead, he spoke about my area of interests, where I grew up, details about my family and whether I was married or not.” 

At the end of the conversation, Mahindra said, “I would love for people like you to join, but I know you won’t because I can’t pay you what you would get elsewhere. You are young, you have big aspirations, but I am constrained by what I can pay to people at a certain level.” Already convinced that this would probably be his new job, Rege said, “Anand, if I were to come on board, what would I do?” Mahindra replied, “Whatever you want.”

Since he wasn’t clear on what role he would like to take, Rege chose to join as Mahindra’s executive assistant to get a top-down view of the group and its various businesses. He does not regret the decision. “I am getting half my pre-MBA salary, but I am thrice as happy as I was in my previous jobs,” says Rege, who completes three years working for Mahindra this July. Authentic leader is a term that came into vogue when Bill George, professor of management practice at Harvard Business School, wrote the widely acclaimed book Authentic Leadership in 2003. According to the book, what defines authentic leaders is that they are individuals who demonstrate a passion for their purpose, practice and uphold values consistently, and lead with their hearts and heads. Anand Mahindra is someone who fits that definition to the T.

Coming of age

Bharat Doshi still remembers the time when a young Mahindra — even before he pursued his MBA from Harvard — spent an entire year at the group, working at different locations. “What struck me even then was his humility. He would, like the rest of us, travel by train to our Kandivli plant, when he could have easily travelled in a car,” says Doshi, who retired as the executive director and group CFO in 2013 after spending 40 years with the group to spend more time with his family.

SP Shukla, president, aerospace and defence, M&MMore importantly, Mahindra came across as a person who was keen to learn and not as someone who was self-entitled. “He was very observant and would ask many questions. He was looking at every aspect with fresh and questioning eyes, as I called them. It was not like simply learning from a senior,” recalls Doshi. 

But the trial by fire for Mahindra began when he completed his MBA in 1981 and joined as executive assistant to the director of finance at Mahindra Ugine, a section headed by his father, Harish. Around the same time, Musco, which held the licence to make alloys and specialised steel products through electric arc furnaces, found itself neck-deep in competition after the government gave out 30 licences to arc furnace producers. The six-player industry expanded six times overnight. It was here that he put to test his management learning.

An article in Harvard Business Review states that during a crisis meeting, Mahindra asked Musco’s managers if they had thought about maximising contribution by lowering costs. “From the looks on people’s faces and their responses, it was clear that few fully understood cost curves or what Mahindra meant by “contribution”. It was then that Mahindra initiated a gradual turnaround by cleaning up Musco’s inventory and streamlining its supply chain. In 1989, he rightfully took over as president and deputy MD.

VS Parthasarthy, CFO, CIO and president, M&MBut the turning point came in 1991, when Mahindra was appointed the deputy MD of Mahindra & Mahindra, even as the nation opened itself to a new era of liberalisation. Doshi remembers how Mahindra was keen to get his act together from day one. “As the deputy MD, he could have spent time at the head office at the Gateway Building in Mumbai understanding the corporate aspect, but instead, he chose to spend time at the plant and focus on labour relations and research and development.”

That decision, in a way, resulted in M&M’s tryst with destiny and Mahindra’s own evolution from an astute manager to an inspiring leader. The big pain point back then was the entry of 100% foreign investment in the automobile sector, meaning that M&M, which was then manufacturing tractors and jeeps, had to make a tough call. On top of it, the multi-utility vehicle and tractor businesses were suffering from manufacturing inefficiencies and an under-productive workforce. Doshi recounts the stark realisation that came to the fore around that period: in 1992-93, Mahindra was manufacturing around 35,000 tractors and 38,000 vehicles with 17,000 people, while Maruti was producing 122,000 vehicles with 4,000 people. “We realised how difficult it would be for us to be competitive. Where was our productivity?”

That year, Mahindra had a run-in with the unions after he announced that Diwali bonuses would be linked to productivity. Against the backdrop of the Iran-Iraq skirmish and a spiralling oil crisis, demand was already down, coupled with high taxes. Jeep producers back then had to pay 66% excise duty. Mahindra — along with senior executives — went to the Kandivli plant to thrash out an agreement. Even as negotiations were dragging on, the restless workforce started gathering outside his room. Anand continued his discussion with the leaders, but also realised what was happening outside. The pressure was building up, but ultimately, Mahindra and the unions sorted out the issue.

“Even in a challenging situation, Anand was unflinching and showed immense calm,” recalls Doshi. But the writing on the wall was clear to Anand and the-then chairman Keshub Mahindra that it was time for change. Three years later, in 1994, a business process reengineering programme was initiated across the group, internally referred to as Badlo Purane Raaste.

Pawan Goenka, president, automotive and farm equipment sectors, M&MThat restructuring resulted in M&M converting into a group of companies operating in six sectors — automotive, automotive components, farm equipment, financial services, infrastructure development and software — while moving out of other industries. Referring to the revamp, he said in an interview, “I provided managerial focus to all our businesses. Dedicated teams of managers have run our businesses since then. I kicked myself upstairs to make sure the structure would work; otherwise, I’d be breathing down the presidents’ necks every day, defeating the idea of managerial focus. I believe that business families should behave like aggressive private equity companies. They must allocate capital, demand performance, create synergies, sustain value systems and implement good governance practices, but they should let professional managers run the companies.”

The move paid off, as the company found its rhythm and the stock hit a high of ₹676 in 2000. But the subsequent market correction saw the stock falling to ₹51 in 2001 and out of the list of top bellwether stocks, which inspired Mahindra to bring together the group’s top managers for a brainstorming session called the Blue Chip Conference, which was later rechristened M101 and has been held every year since then. What hit the company then was the double whammy of a slowdown in both the auto and tractor businesses.

“Normally, we were used to seeing a cycle where auto is down and tractor is up or tractor is down and auto is up. But, in 2001, both were down. So, one started feeling the pain much more,” explains Doshi. The pain did not last for too long, though, as a project whose seeds were sown in 1997 came to fruition in 2002, marking an inflection point in the group’s growth trajectory and its fortunes.

Dare to dream

In the early 1990s, management consultant McKinsey, in its assessment of the group’s future, made a suggestion to the company to do away with its fledging automotive business and instead focus on making it big in the tractor business. Its explanation was that with the amount of competition about to hit the automotive sector, M&M didn’t stand a chance. Mahindra tossed this idea around in the boardroom, where the board felt that if the consultant had made an observation, it should be considered.

Arun Nanda, chairman, Mahindra HolidaysAt the same time, the board encouraged Mahindra to ask what the automotive team’s views were about this suggestion. Their answer was a resounding NO, which Mahindra, too, seconded. But time was running out for the automotive business and the group had to move fast. In 1993, M&M struck a deal with Ford to manufacture the Escort in India. After the contract was signed, Anand reportedly told his American counterpart, “I’m happy to help you get into the local market, but India isn’t a sweatshop for hands, it’s a sweatshop for brains.” What Mahindra wanted was an R&D joint venture, but Ford instead suggested a focus on the manufacturing venture. “I’ve always maintained that Ford did us a huge favour. If Ford had taken up my offer, M&M would still be dependent on the company for automotive technologies, and we would never have dared to develop the Scorpio,” Mahindra later said.

Pawan Goenka, who joined the group as general manager, R&D, in 1993, recounts the sequence of events that finally led to the birth of the Scorpio. “We were asked to give a masterplan for the future. We gave Anand two options: either tweak an existing project or create a new product, sketches of which we had already created,” recalls Goenka, who became president of both the automotive and farm equipment businesses by 2010, and also a member of the board. Mahindra was kicked about the second option, but that would have entailed an investment of ₹600 crore for a group that had a revenue of around ₹4,000 crore and a profit of ₹250 crore at the time.

Moreover, there was no guarantee of success. It was in 1997 that Anand Mahindra articulated his strategy for the automotive business before the board: “We have two routes before us. One is that we do not pursue the project and die a natural death. The other is that we go ahead with the project and, if we fail, we die a sudden death. I prefer taking the second route.”

Ramesh Iyer, MD and president, financial servicesThe rest, as they say, is history. M&M put together a team of 120 engineers with an average age of 27 under the leadership of Alan Durante, the-then executive director of automotives, Goenka and Anand Mahindra. Arun Nanda, who joined the group in 1973 and is now the chairman of Mahindra Holiday Resorts, recalls it as being the only time Mahindra was hands-on in a project. “Scorpio was Anand’s baby. He decided that we should upgrade from a workhorse to an SUV that could compete with cars in cities. The board at that time knew that he was taking a risk, and more than just a financial risk it was a reputational risk, but the board supported his decision in view of his passion and commitment.”

Five years later, in June 2002, Scorpio made its debut and turned around the group’s fortunes for good. In that fiscal, FY03, M&M captured 22% market share in the premium hard-top SUV market by selling 12,000 units. The magic continues till date, with Scorpio selling a record 51,553 units in FY15, its highest-ever annual sales since inception. “There were many moments when we wondered whether we could pull it off or not, but his tremendous sense of conviction was a source of strength for us,” recalls Goenka, who joined the group in 1993.

Guiding force

That approach, of always backing his top team, was evident when Tech Mahindra came in from the cold to buy the scam-hit Satyam Computers in 2009. Interestingly, much before the scam had broken out, Mahindra had made Ramalinga Raju — both were then on the board of the Indian School of Business — an offer to merge their companies, but Raju chose not to respond to the overture. So, when the opportunity came up, albeit in controversial circumstances, Mahindra asked Vineet Nayar of Tech Mahindra just one question: are you confident of pulling it off? To this, Nayar replied in the affirmative. “So, what are you waiting for, go ahead and buy it,” said Mahindra. 

Back in 2009, the sail-through with the board was not that easy, with Mahindra having to convince them about how they were going to tackle the risks associated with the deal. Recalling the meetings, Nanda says, “He is a risk-taker and is willing to lead from the front. That gives us comfort, that if you have taken the right decision, he will support you at the board.”

Rajeev Dubey, group president, HR and corporate services, and CEO, after-market sectorMahindra did three key things — he was able to convince the board of a strategic fit, he explained the potential risks to them and his plans to mitigate the same, and he described how the integration would work and how customer trust would be restored.

Says Gurnani, “Obviously, Mahindra is not an irresponsible manager. His line to me was ‘CP, my supporting a decision is easy, but to make the decision work will be your responsibility.’ Making someone feel responsible and at the same time be so humane about it is a rare quality.”

Luthra, too, savoured the best and worst parts of being a decision-maker when he went on an acquisition spree in Europe, buying three companies: Stokes Group, Jeco Holdings AG and Schöneweiss & Co GmbH. “At the time of all these acquisitions worth hundreds of millions of dollars, not once was I asked questions about valuation. I was empowered to figure that out myself in consultation with the CFO, Bharat Doshi. All I was asked was whether I had made sure that it was people we could trust, were our cultures similar, was the technology right and were we getting appropriate customer access,” says Luthra.

But when the tide turned, Luthra had Mahindra backing him up as well. When the Lehman crisis happened and the forgings acquisitions came to haunt Luthra, he remembers how both Anand and Keshub Mahindra stood by him rock solid. “All that Keshub Mahindra asked was whether I had honestly answered the questions before going in for the acquisitions. He said, ‘We should hang in there — this, too, shall pass, as have many other crises in my experience.’” Ditto with Anand, who said, “I am glad that the captain of the ship did not panic and steered it to safety.”

Yet another example of Mahindra’s ability to walk the talk when it comes to empowering his leaders was evident to VS Parthasarathy, group CFO, when he was made the head of international operations. It was 2004, the group was entering the South Africa market and there was a proposal from South African company African Automotive Investments Corporation — a subsidiary of African Resources and Logistics Corporation — for a JV. But besides the automotive business, the foreign partner also wanted the tractor business to be a part of the venture, which was primarily to engage in assembly and distribution of vehicles.

However, Parthasarthy was not convinced about bringing in the tractors business under the JV’s ambit, since the market size in SA, at that point, was just about 500 tractors. “My view was that how much of that market would I possibly get and that it was not worth our while investing in product development and homologation,” recalls Parthasarthy about the meeting he had with Mahindra and the South African head. 

CP Gurnani, CEO and MD, Tech Mahindra“Yes, I understand your logic,” said Mahindra at the meeting, turning towards the SA representative and adding, “I am so sorry that you have to go back empty-handed.” The gentleman was taken aback by the comment. “What do you mean,” he asked Mahindra, who replied, “You don’t want to go ahead with the JV without the tractor piece and I cannot force my team after empowering them. You see, I am the most powerless guy in this room.”

At that point, Parthasarthy started feeling a bit miserable, since this was the second market that the Mahindra was stepping in to check after the US. But Mahindra’s take was: “Better say it today rather than repent later.” As it turned out, the SA partner did agree for a JV with the automotive business. Eventually, in 2009, M&M took control of the venture by increasing its stake from 51% to over 91%. Similarly, when Parthasarathy found it worthwhile to pursue an acquisition in China, as it would have been difficult to export to the market considering the cost of transportation, among other things, Mahindra gave him the go-ahead. “It is very simple. He empowers you, asks the right questions and supports you.”

That ability to put people ahead of him was once again evident around the time the forgings business was in an acquisition mode. In his earlier avatar as CEO of a telecom company, Luthra was involved in a mega deal with an old IIT colleague and friend, Asim Ghosh, as counterparty. “We agreed that since he did not have the licence that we had and we did not have the licence that he did and given that we were talking about the two biggest circles, there was an opportunity to create value, scale and a national footprint. We agreed to do a swap,” says Luthra. Over several rounds of golf, and based on a history of trust, the deal was sealed. “Unfortunately, my then bosses did not understand the psychological satisfaction that a professional gets from taking on something and taking it to closure. I was not at the formal signing,” sighs Luthra.

Fast forward to the early days of Systech, which has since morphed into Mahindra CIE. “We had made a couple of acquisitions in Europe and put into place a unique structure, sharing equity upside with both European managers and the sellers. The governance model had attracted attention and at a seminar on ‘Asia: Threat or Opportunity’ hosted by Angela Merkel, Anand Mahindra, LN Mittal, the chairman of Siemens and the chairmen of both SDU and SDP were among the invitees.”

Mahindra, instead, asked Luthra to go in his place and address the gathering inside the Bundestag. “Here was all of corporate and political Germany along with all of German page 3, but Anand simply said, “You are the architect, you should go in my place and take credit for what you have done.’ He couldn’t have given me any bonuses that meant more.”

When Mahindra Holiday Resorts, in the first year post its listing, wanted to skip paying a dividend, Mahindra let Nanda, who was the chairman, and the board take that call. “That shows not only his style but, more importantly, his trust in people. In fact, the biggest change, personally, for me since Anand came on board is that he has helped me become an entrepreneur and that’s how I learnt to take risks. I have had more autonomy and authority in businesses that I ran than many sons or brothers of promoters would have had in family-run businesses.”

Ramesh Iyer, who joined Mahindra Finance as GM in 1995 and today is the MD and member on the group executive board, too, shares a similar experience. “When we chose not to become a bank given that the regulatory requirements would have forced us to undo what we had created, Anand understood our concerns. It was not that he was looking for a valuation play if we had become a bank, but he understood the backdrop in which the decision was taken.”

Similarly, when Anita Arjundas of Mahindra Lifespaces found an opportunity in low-cost housing, her only concern was that it’s a difficult space, as return is low and it needs high volumes. But once Mahindra was convinced about the need to enter the space, he told the board that if the group — with all its resources and a manufacturing mindset — couldn’t master the space, then very few could. “That gave us confidence at the senior-most level,” says Arjundas, who joined the company as marketing vice-president in 2002 and took over as the MD seven years later. The company has thus far sold 1,000 low-cost housing units of the total 2,000 being built on the outskirts of Mumbai, and 750 in Chennai. 

In the larger interest

In 2002, around the time of the slowdown, the group found that its cost of capital was higher than its return on capital employed. Following the observation, a rule was enforced that in the auto and tractor businesses, the break-even, which till then was at 70% capacity utilisation, would be pulled down to 50%.

Anita Arjundas, CEO, real estate sectorThe other three critical decisions that came out of the Blue Chip Conference in 2002 were to attain leadership in whichever businesses the group was present in, get a global mindset and focus on innovation. Yet, among the four overarching pillars, the emphasis on finance has always remained. So much so, that at a controllers’ conference in 2007, where all the CFOs of the group businesses were present, the-then group CFO Doshi countered Mahindra’s impromptu speech, where he had said, “All you guys talk about is just numbers. What about passion?” 

Doshi went on to say, “You also need to afford passion. In today’s world, you need a margin to face business cycles. You need a margin to meet forex fluctuations, if you are global. You need a margin for recession, so that you can survive. The same rule applies for passion. Spend as much on passion as possible, but within the criteria of affordable business structure.” Mahindra appreciated the view and it got validated during the 2008 downturn, when all major auto firms slipped into the red but M&M did not. But despite the obsession about return on capital, Mahindra has shown tremendous conviction in persisting with loss-making businesses in the past and continues to do so now, believing in their potential and the ability of his team to exploit the same.

Iyer, for one, can vouch for Mahindra’s persistence in the way he continued to fund the financial services business till it got listed. “He said that growth is going to be driven by the market and not by internal limitations. That was a powerful statement to make, and coming from the top, it just gave us the confidence to build the business the way we wanted, as we knew that capital will not be a concern,” remarks Iyer. With a ₹38,000-crore balance sheet, 1,200 branches and a net worth of over ₹5,000 crore, Iyer cherishes the entrepreneurial authority he has to run the business. “Even when we decided to list in 2006, Mahindra did not see it as a cash cow being given away but something that was essential for business growth. This just shows that what is good for the business will never be stopped,” points out Iyer.

Similarly, in the case of his vacation timeshare business, Mahindra showed a lot of patience and conviction. By persisting with a business in which the group had invested over ₹30 crore, it ended up creating a entity valued at over ₹2,000 crore. Rajeev Dubey, group president, HR and corporate services, and CEO, after-market sector, believes that the hallmark of Mahindra’s management style is his implicit trust.

When Dubey, who has spent over 11 years with the group, took over Mahindra First Choice Wheels, Mahindra asked him, “Rajeev, are you sure you would like to take it over? It’s a loss-making entity. There is no guarantee that you will be able to turn it around.” “No, I want to take it up,” replied Dubey. Since he took over in 2008, the business turned in its first profit in the fifth year and has since been profitable. “He stood by me. He gives credit to people rather than taking it away and that is the sign of a great leader,” says Dubey, who was also the MD of Rallis India.

Following the principle of what is good for business is good for the group, Mahindra has shown a willingness to cede complete control. So, when Luthra, who built Systech into a ₹4,000-crore venture through a series of acquisitions, suggested to Mahindra to cede control to the Spanish group CIE Automotive of Spain, Mahindra once again bet on Luthra. Though the group got 13.5% of CIE Automotive after ceding control, it earned over ₹2,000 crore through the deal and is now counted among the top 25 component makers in the world, with revenue of close to $3 billion. 

Just like he backs his team in good times, so is it when the chips are down. When the much-touted hovercrafts business Mahindra Triton failed to make headway, Nanda informed Anand and Keshub Mahindra about his decision to pull the plug. “Both of them encouraged us to be entrepreneurs and take well-thought decisions, even if it meant taking a risk. When I had to shut the hovercrafts business, Mahindra’s reaction was, ‘Arun, I am glad you are taking risks. If you succeeded in everything you did, I would have thought you are not taking risks.’ Just imagine what kind of confidence it provided,” reveals Nanda.

Parag Shah, managing partner, Mahindra Partners Parag Shah, managing partner at Mahindra Partners, the PE division of the group, still recounts the day when he went to talk to Mahindra about shutting down one of the businesses. “We often hear the saying that you learn from failures, but Anand, I think, truly walks the talk in that sense. Because he made me conclude that I had done a damn good job despite failing. ‘Parag, what is the money we have lost? What is it that you have lost in terms of your number of years of effort? What is it that you have learnt? Now you tell me what are you going to do with these learnings.’ Now, when somebody goes through this and is asked what he can learn from failure, it is actually beneficial to the group.”

Hum saath saath hain

In 1997, when Mahindra took over as MD, he started the culture of the War Room, where strategies for each business were periodically discussed in the presence of the group chairman and group presidents for strategy, HR and finance from the head office. Shukla, who was once the group strategy president, says, “In the strategy, operations and budget war rooms, I actually experienced how well Anand can encourage, promote and sustain dialogue between the business that is presenting and the corporate staff that is listening, brainstorming and contributing to the strategy. As chairman of the group he could — but never did — give directives. Rather, in the nature of dialogue, Anand always facilitated conversations in his endearing style. Even the junior-most colleague in the room is encouraged to speak his mind and listened to attentively. The atmosphere in the war rooms is a wonderful snapshot of Anand’s leadership style in managing this vast group.”

Shukla points out that Mahindra neither raises his voice during these discussions, nor does he avoid answering questions. Rege, who occasionally attends such sessions, points out: “Whenever a question is posed, everyone wants to know what Anand is thinking. It’s very easy for Anand to given an answer and for everybody else to fall in line and say, ‘That’s exactly what I was thinking.’ But I love the way he does it — whenever a question is posed to him, he throws it back to the audience, saying, ‘What do you guys think?’ Everyone knows who the smartest person in the War Room is, and yet, Anand will make it a point to make you feel as if you are the smartest person around. That’s a unique ability.” 

Shah of Mahindra Partners concurs. “In every meeting, in all probability, he walks in knowing more about the subject than anyone else present. He has some indication of where he probably wants to be. But he still makes it a point to listen to everyone.” Gurnani terms Mahindra’s approach as a very indirect style of envisioning concepts.

“He will never tell you that you should take a target 30% higher. His questions would be in the form of what I call reflective conversations. He will say, ‘If you were to grow your business exponentially, if you were planning a 10X growth, what are the scenarios that you would look at?’ Now, that is the kind of question where he has made you think, instead of being prescriptive.” Though collaborative, Mahindra has his own way of weeding out noise.

“He takes decisions based 60% on people’s inputs and 40% on his own judgement. He is like an owner who bets on the jockey (the person who is going to execute), more than the race or the turf. If he is confident of the jockey, I think that influences his 40% as well,” adds Gurnani. He says that though quite a few in the management were not convinced about Luthra’s acquisition strategy, Mahindra bet on him. “Anand was convinced that Luthra was going to create a billion-dollar conglomerate, and it does require time for multiple acquisitions to be integrated. And, eventually, when the Mahindra-CIE deal happened, shareholders benefited big-time.”

On occasions when Mahindra himself moots an idea, he is perfectly fine if there is a strong argument against it and does not impose his views. Sometime during the 2008 crisis, there were a lot of distressed assets coming up in Dubai and in parts of the US. Mahindra asked Arjundas why they were not looking at new markets and picking up distressed assets. “My view was that as an organisation, we were not ready to go out of India and did not have sufficient management bandwidth to divert,” says Arjundas, adding that Mahindra went with her observation. “In that sense, despite his acute sense of understanding, Anand truly believes in empowering his team and does not impose his view.” 

Shantanu Rege, executive assistant to MahindraThere have been instances when Mahindra has been open to changing his stated position on the basis of even the smallest of insights. Pre-2008, the group had decided to go ahead with an M&A. An employee who was not part of the decision-making process sent off an email to Mahindra with a new data point. “In most situations, the response would have been like, ‘We have heard you out, but we are concluding the deal.’ Instead, we actually had a meeting the following day and decided not to go ahead with the original plan, instead bidding just on the basis of that new data point. It was something to do with a new liability that may have come up in that country. You may have done the right thing for the organisation, but you possibly ended up owning the employee for life,” points out Shah. 

The participative nature is not just confined to War Rooms but even outside. Iyer points out how during an annual retreat in Jaipur, where 101 senior executives were present, Mahindra joined in the fun. As the evening progressed and the crowd started thinning out, he stayed on. So much so, that Mahindra stayed on till the last batch of people retired for the night at 1.20 am. As part of a talent-retention approach, Mahindra also encouraged Iyer, who loves to sing, to nurture special talent across the group under the banner of mBeats. Every Friday, a professional teacher arrives to train 60-70 employees.

“We are now trying to create a team song for mBeats and recording it in a studio, with plans for a show during the annual Rise awards,” remarks Iyer. Taking his employee engagement to an intellectual plane, Mahindra has also initiated a management programme for top executives. Called the Mahindra Universe Programme, it runs in partnership with Harvard Business School at Boston. The idea is to build a multi-cultural management and get a feel of global trends. “I’m not going to pretend that M&M isn’t Indian, but it’s much more than that. I am building a group where intellect and ideas have no boundaries or nationalities,” Mahindra has been quoted as saying. Every year, the top 45 executives across the organisation spend a week at Boston and MIT. “The idea, as Stephen Covey says, is to focus on your process capabilities,” says Parthasarthy. 

Genuine warmth

It was Rege’s first weekend since joining the chairman’s office, and he was at his computer replying to mails early in the morning. “Within the next 10 minutes, I got a call from Anand. ‘Shantanu, what are you doing? While I expect you to work from Monday to Friday, Saturdays, I don’t want you to work. If you still want to work, that’s your problem.’ Here is a boss who himself works over the weekend, but does not expect people down the line to put in long hours over the weekend,” says Rege. Not surprising, then, that almost everyone in Mahindra’s A-Team is reverent of their boss. “Somebody driving his own car, somebody giving importance to subordinates — all this, I think, is very, very unusual. I haven’t seen this kind of egalitarian leadership anywhere else in India. Maybe his undergraduate studies in America, maybe that part influenced him, making him a people person,” feels Gurnani.

Nanda believes that Mahindra, through his leadership style, has probably added more value to the group in the past 10-15 years, than it had seen in its first 50 years. “We are not the biggest but we are respected for our value systems and governance,” says Nanda. Little wonder, then, that loyalty runs deep in the employees’ blood. Doshi narrates an incident when he got a call from a headhunter who was offering him a 30X hike in compensation. “I said, thank you very much, but I am not interested. To which he remarked, ‘Are you saying this because you are too close to the management?’ I don’t know what ticked me off, but I replied in a split second. ‘I think I am the management.’ That is what Anand’s empowering style is all about,” says Doshi. 

For someone who was heading a fairly large business at the Tatas, Dubey has no regrets about making the switch. “I might sound like a sycophant, but I find Anand to be a truly outstanding and exceptional human being. Over the years, I have met many people who have a sharp intellect. But it’s very rare to find people like Anand, who are not only authentic, but combine that with a very fine intellect, a warm and open heart and a highly evolved soul,” says Dubey.