Education: Chartered accountant; MBA from London Business School Career: Took over the reins of the Aditya Birla Group after his father Aditya Vikram Birla passed away in 1995. Since then, has transformed the $2-billion group into a $41-billion behemoth with a presence across 36 countries in metals, viscose staple fibre, carbon black, cement, telecommunications, branded apparel, financial services and retail
Dressed impeccably in a formal shirt and trousers but sporting a pair of slippers instead of high-street Oxfords, Kumar Mangalam Birla eases himself into a comfortable chair a few minutes before 11 am at his stately residence on the capital’s Amrita Shergill Marg. Facing his plush home is a large and beautiful garden, which, on a crisp February morning such as this, is the best place to laze with a warm brew. But for the chairman of the Aditya Birla Group, a long, hard day at work was in store instead.
Within a few minutes, Birla would be glued to his iPad, with Chandan Agrawal, a key member of the chairman’s office, all set to signal the beginning of the coal auction. This was a pretty big bid for the group and Birla would not budge from his seat till 1 o’clock the following morning. This situation brought Agrawal, who had joined the group three years before this eventful morning, in the closest proximity yet to the chairman, with two more Mumbai-based colleagues set to join them in a bit.
When it comes to high-pressure, time-bound situations like this, the trick for companies is to make the right bid at the right price. As simple as that may sound, every participant is up against many other interested parties, who, in all probability, might push the bid amount up without warning. After a full day of back and forth, well into the evening, it was finally time for the last bid of the day. During the whole process, Birla had a number in mind and he refused to cross that. The moment the bidding increased beyond that price — by an insignificant 0.25% — he decided not to pursue the bid.
Of the four people involved in the decision at that moment, three thought that the hike was worth it. Not Birla, though. He refused the deal and, stepping back, asked the others if they really thought the asset was worth that inflated price and whether there was a way around the hike. In reality — Birla had already decided how much he was willing to push himself on the price and that limit had been reached. His team may have thought that the risk was worth it but, for Birla, his decision had already prevailed.
Though he might consult his A-team and hold lengthy discussions with them, at the end of the day, it is clear that at his firm, Birla remains the man who takes the decisions, often catching his top brass unawares. Of course, this assertion comes with both, a measure of firmness and an element of surprise. Much of this was on display when the Aditya Birla Group acquired US-based carbon black manufacturer Columbian Chemicals in early 2011. The discussions between the two parties had gone on for a while, often till the unearthly hour of 4 am.
Then, in one decisive meeting, Birla swung the deal in the company’s favour. Back then, Birla was seated in his room in Mumbai, with Jacques Nasser of One Equity Partners, the private equity fund that owned Columbian Chemicals, on the speakerphone at the other end of the line. Seated in Birla’s office were Dev Bhattacharya, group executive president, corporate strategy and business development and Santrupt Misra, CEO, carbon black business, and director, group HR, the two men apart from Birla completely clued into the deal.
When it was clear that the discussion was stuck because of the price, Birla unexpectedly told Nasser that he was raising his offer by $100 million to $875 million. The seller was taken aback, while Birla’s team was stupefied. “We were all shocked and did not understand what was going on,” says Dev. A calm Birla clearly but firmly explained the rationale behind his decision to his team, adding that he felt that “this company had strength”. He was remarkably prescient, too: the group went on to become the largest player in the carbon black business after this deal. According to Indu Jacob, principal executive assistant at the chairman’s cell, there was sound wisdom guiding Birla’s decision. “There was strategic rationale. You strike a deal because you believe in it, and that is a level of discretion that only an owner has,” she says.
Last word is his
Cut to February 2007, when Dalal Street was witnessing unabated levels of M&A activity. Hindalco had acquired Canadian aluminium maker Novelis for a whopping $6 billion, making it one of the five largest players worldwide. Here, too, Birla’s A-team was not completely in favour of the deal, given that Novelis had been bleeding for a long time and it had several fixed-price contracts with buyers such as Ford and Coca-Cola. In addition, the huge debt being raised for the acquisition would put pressure on Hindalco’s balance sheet. Again, Birla differed and went ahead with the deal. Often, his point of view is one that he has thought through well in advance, and not an impulsive, last-minute decision.
Be it the folks who have been around for close to two decades or the young, high-profile executive assistants who have come on board in recent years, Birla’s employees all say they enjoy working with this down-to-earth, understated billionaire. If the old hands display a high loyalty to him, the younger breed loves the ease of working with him. They might work very hard and give the job their all, but are happy to leave the decision-making to the chairman.
It is a style of management that has evolved over time — complete with an often-subtle, sometimes-obvious firmness. Dev says that Birla is an introvert and never indulges in backslapping bonhomie. “When I first met him, he came across as someone who was Westernised yet extremely tentative. It was like speaking to a peer. He asked me what I thought about the group’s strategy. Even today, instead of telling us what to do, he encourages us to think,” he says.
From conversations with his A-team, Birla comes across as a man who is willing to go the distance to put him or her at ease. In fact, for all of Agrawal’s familiarity with Birla today, his first meeting with him was anything but relaxed. Agrawal was nervous by his own admission. “He sensed that I was on the edge and asked me if I was from Rajasthan. Then, the discussion veered to my family and why I had decided to take up employment when my father was an entrepreneur,” he recalls. That 2012 meeting lasted a good 45 minutes, with at least two-thirds of it being only about Agrawal’s family. Eventually, Birla asked him about things he thought the group ought to be doing. “It was a very gentle line of questioning and I did not realise it then,” he laughs. “It’s not easy to read his mind and you can only gauge his thoughts through his actions.”
Though Agrawal and others like him find Birla’s style of questioning unique, others in the group confess to being apprehensive about it or plain dreading it. But principal executive assistant Rohit Pathak says the crux of Birla’s question is whether “something will make money.” He narrates a story related to e-commerce, a topic about which he was involved in extended discussions with Birla. “He asked, ‘How do you predict fashion? How will you deliver fashion? How will the collection system be different? How profitable can it be?” Jacob says that there is a joke in the chairman’s office that the boss will always ask a question nobody will have an answer to. “His questions often test one’s understanding of the business,” says Pranab Barua, business director, apparel and retail.
Barua thinks back to when he was making a presentation to Birla and his executive assistants in early 2007. Barua was then with IVFA, a GW Capital entity that owned a substantial stake in the Trinethra supermarket chain, which was in the process of selling out its business to the Aditya Birla Group. This day-long presentation saw Birla asking Barua and his team how the price of tomatoes was being decided. “I was left scratching my head about how the question had come up,” he says.
And Birla is known to be very particular about receiving answers to his questions, trivial though they might sometimes seem. Employees say he will often not move away from a subject unless he is absolutely clear or convinced about it. “It is not unusual for him to sit down and take notes. He will say, ‘Sushil, yeh baitha nahin mere dimaag mein,’ and try to put the math on paper to get some clarity,” smiles Sushil Agarwal, CFO, Aditya Birla Nuvo. And if he is not convinced, he won’t take a decision. Dev points out that Birla keeps the speed in his hands. “You cannot push him to take a decision,” he says. It is a method that his team has understood over time. “If he has not yet taken a decision, you will be flooded with questions,” he grins. “And if a mail remains unanswered, you know it’s not such an important issue,” says Jacob.
Talking the talk
What stands out about Birla is his polite and gentle nature, which makes people comfortable around him. When Ajay Srinivasan first met Birla in April 2007, he was in Hong Kong employed with Prudential Corporation Asia as it CEO. After several meetings, Birla made him a job offer, saying he had done his due diligence and that it was now up to Srinivasan to make up his mind. According to Srinivasan, the message from Birla was, “I know what I want and you can bring that to the table.” “He is very down-to-earth, easy to engage with and extremely charming,” says Srinivasan, now CEO, financial services, with the group.
While this honesty and politeness reflects in his daily interactions, Birla is equally effusive with his praise and curt when it comes to criticism. “He is clear with his feedback and will express appreciation with handwritten notes if good work has been done,” Srinivasan says. He adds that Birla is equally straight when it comes to disagreements, often saying, “I don’t think we should do it this way.” Often, he will give his team a patient ear and then gently but firmly insist on doing things his way. “Bosses can be volatile, but he instead is very equanimous.
His appreciation is always in writing and I have an entire file filled with all his notes. ‘That is outstanding’ is the best praise you can get, and ‘That’s very disappointing’ denotes your worst moment,” he adds. Srinivasan says this is an indication for the concerned employee to then figure out where he or she went wrong. This will be followed — a little while later — with questions about the learnings from the experience. But there is strictly no navel-gazing about the whole matter.
Birla is not an easy boss to read and his team readily accepts that. So does a former business head, who describes Birla as inscrutable. According to him, it is quite normal for Birla to sit through an hour-long review meeting and utter barely a few words at the end. “Sometimes, he would just say ‘fine’ or even nothing at all, and just walk away,” he says, adding that this often left people confused and unsure. The executive adds that a “Let’s meet later” comment at the end of a long meeting usually meant it had gone off very badly. “If you were particularly good with a presentation and if he was impressed, he would whisper encouragement in your ears,” he explains.
Very often, a bad meeting would be followed by a call from someone in Birla’s office, asking for more details on the issue. “With him, you are always left guessing and trying to figure out what he is thinking.” He says that — though not directly — Birla would convey his displeasure in a manner that would be amply clear. “For instance, you would be called for a meeting at 2 pm and would be left waiting endlessly. Many hours later, you would politely be told to come back the following day,” he narrates. That, he says, was ample indication that all is not well.
When the chips are down, Birla dutifully plays the role of the supportive boss. For instance, in the early days, Srinivasan faced a situation where a loan in the NBFC book had gone awry. Birla’s reaction to this was, “Let’s figure out what the issue is and just move on.” Even if he is worked up, Birla rarely allows his team a peek into that state.
This ability to remain calm is also brought up by Debu Bhattacharya, managing director, Hindalco, who was in Australia to buy a mine a couple of years after joining the group in 1998. For undisclosed reasons, Bhattacharya decided not to pursue the deal. “I called Mr Birla around 9.30 pm to tell him that I had walked away. He was very relaxed and said whatever has happened is for the good and that something better will follow,” he recalls. With both Bhattacharya and Birla having worked on the deal, the former was disappointed at the failure, while the latter was supportive, composed and level-headed instead.
Sumant Sinha, who left the group in July 2008 after a five-year stint as CEO, Aditya Birla Retail, says Birla delegates quite a bit, which makes him easier to work with. “He gets involved only at the strategic level, be it M&A or taking a decision on large capital investments. The rest is left to the team,” he says. A case in point was the $6-billion buyout of Novelis by Hindalco in 2007, where Birla, he points out, did not travel overseas at all. “He left it to Debu and me to take charge of the situation,” says Sinha. That said, there is also an eager, enthusiastic and involved side to the boss, as Himanshu Kapania, managing director, Idea Cellular, saw in June last year, when the telco was trying to raise Rs.3,750 crore through the qualified institutional placement (QIP) route. Given that the QIP process would start after market hours, Kapania told Birla he could head home and that he would update him by 9 am the following morning.
“‘Nothing doing’ was all he said. He went home, returned quickly and was with the team through the night, tracking the progress of the QIP,” narrates Kapania, who was surprised Birla wanted to get so involved in the proceedings. Once it was clear that the QIP had gone through, it was celebration time with the bankers. “He was a very happy man,” adds Kapania.
Even in tough times, Birla was a pillar of support, especially when the telecom sector saw 2G licenses being cancelled in early 2012. Kapania, who met Birla very often during this period, says the man never got worked up even in the face of intense adversity. “He was very calm and took the initiative of meeting the prime minister and the finance minister. He was very involved with what was going on.” Kapania terms this the soft-on-hard-stuff approach, meaning that Birla was never overwhelmed by the situation, no matter how challenging it was.
Attention to detail
In his interactions with his colleagues and juniors, Birla is nothing but exceedingly accommodative and attentive. At his office, Misra is talking rapidly about his boss when his cell phone rings. KMB are the three letters that flash on the screen. “Good afternoon, Mr Birla,” he says quickly, before excusing himself for all of five minutes, only to return with a big smile on his face. “Strange that we are speaking of the man and he calls,” he quips. Every time Birla calls anyone from his A-team, he makes it a point to ask if the person has a moment to talk. Today is no exception and this courtesy is what has kept people like Misra going since he joined the group in 1996.
This personal touch is not restricted to the work front alone. During a particularly tough placement year at BITS Pilani, where Birla is the chancellor of the institute, he personally called up the heads of HR at several large organisations and requested them to come over and recruit people. “That is not a small thing to do for someone at his level of seniority,” explains Misra.
According to him, Birla is always open to debating an issue and will reverse his stance if need be. Two years ago, he called Misra to say that non-vegetarian food should not be served at any of the group’s factories across the world. “He asked me to send a circular to that effect. This was a difficult decision, given that we had people from across nationalities working for us,” explains Misra. Birla’s rationale was that the legacy of his family should be respected. After a couple of conversations with Misra, Birla decided not to enforce his decision. During this period, the chairman spoke to his grandparents, BK Birla and Sarala Birla, who also believed a decision like this should not be forced on anyone. He finally decided not to push his own decision. “He may not agree with you, but he will certainly reflect on what you said,” Misra says. “He always has had a lot of respect for hierarchy,” Sinha adds.
Birla is not known to have a temper but will make his point adequately clear when need be, without pulling any punches. Dev himself recalls Birla losing his temper on exactly two occasions. “There was a marked increase in his decibel levels at that time,” he says, without revealing why his boss lost his cool. It is quite normal, explains Dev, for Birla to call at 7 am to ask why a certain mail has not been responded to. “That is his way of displaying aggression. It is relentless but gentle,” he explains.
Businessman next door
To say that Birla wears his success lightly is an understatement. Agarwal remembers the day when he got a call from the former’s better half Neerja, asking if tickets could be organised for the IPL cricket match that was about to start a few hours later. The stand was not a priority, she said, adding that it was just the kids who wanted to go. The whole exchange was on a very casual and unassuming note. Agarwal managed to scrape together the tickets and sent them across. A little while later, he was answering an incredulous call from a friend, who said he was shocked to see Agarwal’s boss on television, watching the match live with his family from the general stand along with thousands of other spectators. “I immediately called Mrs Birla and told her she could have informed me that the boss was coming along.
I immediately requested her to tell Mr Birla to shift to the box since I was under pressure to make amends. But she turned down my request several times and asked me to relax. Later, we came to know that he had even gone to the vendor at the stadium and bought snacks for his children,” says an amused Agarwal.
To people that work with him, Birla is a boss they can reach out to. And sometimes, that equation runs both ways, leading to unintended hilarity. There goes a very popular story that Birla rarely carries his wallet and this quirk has lent itself to many a funny situation. Misra chuckles when he narrates two instances where he literally had to bail out his boss. The first goes back about a dozen years to an award function at the Taj Mahal Hotel in Mumbai, where Birla was with the jury members. Misra was a part of the crowd that congregated for high tea after a gruelling day. “I was standing a couple of feet away from his table and was a little perplexed when I saw him shifting uncomfortably in his seat,” recalls Misra.
As he went up to the chairman, he was met with a worried look. “Dr Misra, I am not carrying my wallet,” is what Birla said. Misra picked up the tab, only to encounter the same incident about two years later. This time, it was at Jaipur’s Rambagh Palace and Birla was accompanied by his wife and kids, who had decided to join him on the official tour. Misra was enjoying a quiet meal with his team when he spotted the chairman walking around the lawn, looking quite lost. Once he neared his boss, Misra was informed that Birla had left his wallet behind yet again!
It is quite normal for Birla’s employees to see the chairman behave in an uninhibited manner. Agarwal remembers fielding another such incensed call, this time from Adlabs founder Manmohan Shetty, asking the former to give him a heads-up the next time the big boss wants to watch a movie at a multiplex (Agarwal guesses Shetty’s daughter Pooja spotted Birla in a queue). “Shetty was quite embarrassed,” he smiles.
Known to have a liking for big brands and dressing up, Birla often visits his apparel stores (including Van Heusen, Louis Philippe and Allen Solly) every quarter. “He shows up unannounced, depending on whichever city he is in. It is not unusual to receive a text message from him with feedback about a store or brand,” smiles Barua. When More, the brand under which the group runs its retail business, opened its hypermarket in Bengaluru on August 15 last year, Birla walked in, dressed casually in jeans and a T-shirt. His 45 minutes at the store were spent walking through the sections and interacting with the staff about which product was likely to sell. But the incident that takes the cake was the one when Birla visited Westside, only to have someone come up to him and say, “You look so much like Kumar Mangalam Birla.” The unassuming and polite to a fault Birla later told his employees he did not know what to say.