In this scenario of global economic crises, how do you position Corporate Social Responsibility initiatives? (Especially considering the fact that at Mahindra, rightfully and meaningfully so, CSR depends on the PAT of every company)
I'm very pleased that there is at least this one question on CSR! If the current meltdown has demonstrated anything, it is that overweening ambition and greed do not have a place in tomorrow's world. There is incredible animosity now in the west, particularly in America, towards the past Wall Street role models that are believed to have maximised profit goals to the exclusion of societal goals.
The last decade saw the rise of financial wizards who were idolized for their single minded pursuit of profits and anyone who tried to genuinely adopt a 'triple bottom line' approach was seen as 'wimpy' and not aligned to shareholder interests. I believe the world has now changed dramatically. Consumers want to buy products and services from companies that fit better into their societies and communities and I believe such companies will, as a consequence, demonstrate better financial results. However, I think we have to confine our funding of CSR activities to the profits we make, because if we don't, we may not have profits in future to continue our good work!
Good Morning Mr. Mahindra. Thanks for the opportunity to chat with you. I have two questions a) Many countries are focusing on alternative energy resources and green technologies. Coupled with the thought of employment generation, minimizing dependency of India on foreign oil etc., How do you see M&M as a company participating in such an initiative? b) How are we participating in our efforts to overcome / address / improve infrastructure related needs in our country? or other similar initiatives from multinational companies in India, to establish 'Intelligent Urbanization' efforts. Thanks.
Two great questions, since it is an opportunity to showcase that we are in the forefront of these efforts! I could write a hundred page answer to these queries, but let me just say that Mahindra is increasingly being seen, both in India and abroad, as a leader in the green movement. Quite apart from the CSR intitiatives we have taken--like the 'plant a million trees' campaign, in each of our sectors, we're adopting climate change as a key plank in our product or service platform.
At the last auto show in Delhi, while the NANO garnered all the limelight--quite justifiably-- the theme at our stall was 'Green warriors' and we only showcased our alternative energy vehicles, ranging from the hybrid Scorpio to the hydrogen three wheeler. Indeed, M&M's auto division recently received the 'Green vehicle' award at the NDTV Car and Bike awards, for our Micro Hybrid vehicle. In addition, Mahindra Lifespaces, our real estate company, bases its market positioning on providing green homes. We were the first developers to receive platinum ratings for some of our projects.
Finally, Mr. Rajeev Dubey has become a renowned spokesman for corporate India's green ambitions, and has spoken not once, but twice, at the British Parliament on our green plans, and on why Indian companies will be more credible green crusaders than western multinationals.
What was the most encouraging (or perhaps simply the least discouraging!) thing you experienced at Davos this year?
The most encouraging thing was that the participation at Davos this year was at a record high! Everyone seemed to feel that it was worth coming together to exchange ideas, and work swiftly towards a COLLABORATIVE resolution to the world's economic woes. Bush's Invasion of Iraq, was an example of egregious unilateralism. Davos showed that the West has recognised that in tomorrow's world, problems are best solved through collaborative action.
Sir can you kindly apprise us as to how Davos has helped Mahindra?
Davos reminds me of a vast, global caravanserai, (a crossroads and meeting place for global caravans) somewhat like what Samarkand used to be for global travellers in ages past. You take your caravan and park it there, and mingle and interact with all the other travellers from all around the world. It's an opportunity to learn what's happening in distant places, a place to observe new technologies and practices, and a place to make contacts for trading and business. Finally, it's a way of letting the rest of the world know who you are and that your company is worthy of respect.
The debate on whether India is decoupled from the impact of the global financial crisis has probably come to a premature end. In this context, what do you believe should be the Mahindra Group''s stance on globalisation of its businesses? Are we better off without adding complexity and multiplicity to the number of variables that affect our business models?
Well, we first started out with hubris, claiming that India, like China, would be decoupled from the western world's economic woes. Frankly, I have happily claimed that I was never one of the votaries of that theory, since any economy of global significance could never be completely decoupled. Then, the debate moved to its next phase, and we capitulated and admitted we could not be decoupled. But I believe the pendulum swung too far to the other extreme. Because there IS a very large part of India's economy that IS decoupled from the world, and that is Indian agriculture. Rural demand and growth will be the 'flywheel' that will move India's economy forward even during these times. And if we do retain this advantage, as well as strong support from a sound banking system, then there's no reason for us not to go 'window shopping' for global assets AS LONG AS these are aligned to, and enhance the long term strategies of our businesses.
Sir my Dad says, "Where is the recession? I can't see it! The queue outside the mall, the petrol pump, at the railway station, is still the same. Recession is for those who live beyond their income. There is a Marathi quote, Panghrun Pahun Paay Pasrave. The majority of Indians still adopt this lifestyle. This applies to organisations as well..." Do you agree?
Wonderful quote! I couldn't agree more. If you look at which segments of the economy or companies are faltering, it is those which got overly ambitious and lived beyond their means or bought global companies that were too large and are now draining their resources. And what is selling the most in the automotive sector? Products like the XYLO, which provide uncommon versatility and value... Tell your dad I agree with him.....
Dear Sir, our Government has announced several packages to help us overcome the recession. Do you think this move will be beneficial? How long do you think it will take the Indian auto industry to recover?
I think these stimuli will certainly help for two reasons: one is that they will help bring prices down and encourage consumption, and two because they signal the government's intent to take the crisis head-on, which will provide a psychological morale booster. Psychology is a very important element of recessions and cannot be ignored.
Dear Anand - It has been widely postulated that it is the inherent Indian/Asian cultural traits that have helped us weather the financial crisis better than the West, and will see us emerge stronger from the slowdown. How did your interactions with world business and political leaders at Davos validate or refute this view?
I've already spoken about the strengths of the Indian agricultural economy and unintended benefits of our retarded banking reform. These are the real reasons for our capacity to show growth even in the face of a global meltdown. These, more than any esoteric 'asian' cultural factors have worked in our favour. It is also true, of course, that we Indians, (and most asians) have seen very hard times in our own lifetimes, and hence have a more optimistic view of the future than western societies. That's why we alway seem to rank high on surveys of happiness! That psychological trait is aptly summarized by the film 'slumdog' and partially explains its astounding popularity.
In this scenario of global economic crises, how do you position Corporate Social Responsibility initiatives? (Especially considering the fact that at Mahindra, rightfully and meaningfully so, CSR depends on the PAT of every company)
I'm very pleased that there is at least this one question on CSR! If the current meltdown has demonstrated anything, it is that overweening ambition and greed do not have a place in tomorrow's world. There is incredible animosity now in the west, particularly in America, towards the past Wall Street role models that are believed to have maximised profit goals to the exclusion of societal goals.
The last decade saw the rise of Financial wizards who were idolized for their single minded pursuit of profits and anyone who tried to genuinely adopt a 'triple bottom line' approach was seen as 'wimpy' and not favourable to shareholder interests. I believe the world has now changed dramatically. Consumers want to buy products and services from companies that fit better into their societies and communities and I believe such companies will, as a consequence, demonstrate better financial results. I think we have to confine our funding of CSR activities to the profits we make, because if we don't, we may not have profits in future to continue our good work!
What was the most encouraging (or perhaps simply the least discouraging!) thing you experienced at Davos this year?
The most encouraging thing was that the participation at Davos this year was at a record
high! Everyone seemed to feel that it was worth coming together to exchange ideas, and work swiftly towards a COLLABORATIVE resolution to the world's economic woes. Bush's Invasion of Iraq, was an example of egregious unilateralism. Davos showed that the West has recognised that in tomorrow's world, problems are best solve through collaborative action.
Kindly let us know what solution you came across at Davos to help fix the recession from the India point of view? Also, what are your views on the recent protectionist comments made by Mr. Obama.
I wish solutions were so easy to come by! In fact, I found the mood of western participants at Davos extremely gloomy. I was happy to come home and bathe in our traditional optimism again! I actually found that India will be less impacted than the rest of the world's major economies and hence has a chance to become a magnet for capital over the next few years as long as we achieve at least 5% GDP growth in F10. As far as Obama's protectionism is concerned, I think a lot of it is political rhetoric. If anything, his policy on H1B visas will create greater offshoring to countries like India and China.
Sir, in the current global scenario what should be the aim of any company?
At the last Blue Chip*, I did give some guidance on how I thought we should face the current turbulence. My prescription had three elements: REBOOT, REINVENT, and REIGNITE. Which essentially is: a)get back to basics, and lower our costs and breakeven levels, b) focus on innovation, especially frugal innovation c) and finally, don't lose our entrepreneurial spirit and our ambitions and keep scanning the local and global environment for opportunities to expand our market share and our global footprint even as former global giants flounder.
* Blue Chip refers to Mahindra's Senior Executives conference which is held on an annual basis