Anand Mahindra: The Federator
Image: Vikas Khot
Award: Entrepreneur For the Year
Chairman and MD, Mahindra & Mahindra
Interests outside of work: Music, movies and photography
Why he won this award: For the tremendous growth seen by the Mahindra group, from a turnover of around $1.35 billion a decade ago, to $16.2 billion today. The group is now a federated structure, and not a centralised conglomerate.
He learnt weaving at school for a while, choosing it over woodwork. And it is the direction of the threads in a fabric that come to Anand Mahindra’s mind when looking for words to describe the span of his 32-year career at Mahindra & Mahindra. “To me, the peaks and troughs seem to flatten out. They seem not like highs and lows, but like the warp and weft in a weave,’’ he says. Things intervene and everything seems like it was a necessary learning, to get to where you are. Nothing seems excessive.
When Forbes India met the 58-year-old Mahindra at his new office at Gateway House, an oasis of calm in South Mumbai’s busy Apollo Bunder, he was in a reflective mood. He moved to this office over a year ago after taking over as chairman of the $16.2 billion group from his uncle Keshub.
On this day, the man, who now runs a group founded by his grandfather 68 years ago, has more things to complain about—if only for a fleeting moment. He is unhappy that someone in the ministry of finance wants to tax his sports utility vehicles at a higher rate just because they use diesel for fuel (“If I am growing, I will be taxed?” Mahindra asked the bureaucracy). He is flabbergasted that someone in the ministry of commerce and industry would free foreign direct investment in education–only to put in a clause restricting the opening to non-profit universities (“What for? Let them make money”). He bristles when we ask him whether he should be making scooters (“Why don’t you ask a well-known Japanese company why it went from two-wheelers to cars?”).
But cribbing is not what Mahindra does best. If that were so, he wouldn’t have been able to grow the group 12 times in a decade from around $1.35 billion to $16.2 billion in 2013. The group he heads now is unrecognisable from the one he joined 32 years back when he returned with an MBA from Harvard to join his father Harish Mahindra’s company, Mahindra Ugine Steel Company (Musco).
In 1981, India was just beginning to liberalise in homoeopathic doses and the Mahindra group was a tiny dot on the corporate firmament. Come 1991, as the winds of competition shocked India’s business families out of their comfort zones, the bet was that Mahindra may be one of those nature may have marked out for extinction.
“When India opened up post-1991, one of the companies that I thought would go under was M&M,” says Vijay Govindarajan, professor of international business at Tuck School at Dartmouth. “But the remaking of this group has been dramatic. People say one man can’t make a difference. In this case, one man has. If you take him out of the equation, the story would have been different.”
In the last five years, the Mahindra group has executed 33 mergers and acquisitions worth $4.2 billion. The group has grown beyond making steel and rickety jeeps and tractors. Today Mahindra & Mahindra (M&M) makes SUVs—in India and South Korea (Ssangyong). It exports to Latin America and South East Asia. Mahindra Tractors is the world’s largest tractor company selling tractors in India, China and the US. The group also makes cars, an electric car, motorcycles, scooters, trucks, yachts and aircraft.
At Mahindra Systech, it makes auto components across five continents. Tech Mahindra is the fifth largest IT services and IT consulting company in India. Mahindra Retail (Mom & Me) sells products for expecting mothers and babies. More than 1,60,000 Indians choose to take a break with Mahindra Holidays and Clubs every year. Mahindra Agriculture is the country’s largest exporter of grapes and pomegranate. With a market capitalisation of Rs 15,000 crore, Mahindra Finance is the largest non-banking finance company in rural India. Mahindra Solar is making inroads in solar farms. Mahindra Logistics is a Rs 1,400 crore business already. Mumbai Mantra makes movies, though not very successful ones so far.
Anand Mahindra’s mantra is not about winning all the time, but to ensure that failure does not cripple. He is building a live, growing organisation—one that can evaluate, incubate, build and scale up businesses continuously, even while the flops fall by the wayside. It is tempting to see the “group” as a conglomerate, but Mahindra prefers to call it a “federation” where each company is ring-fenced from the damage failure elsewhere can do, even while being free to finance its own growth and make its own mistakes.