Mr. Anand Mahindra, Vice Chairman and Managing Director, Mahindra Group, recently participated in an intranet chat with employees across the Group. As the Head of one of India's leading business houses and an insdustry spokesperson, Mr. Mahindra shared his views on the Indian economy, the global financial crisis and his experiences at the World Economic Forum's Annual Meeting at Davos.

Presenting excerpts of the conversation...

Morning, Mr. Mahindra. You've talked about zeitgeist with reference to slumdog millionaire..the overwhelming desire for hope and optimism - can you elaborate on zeitgeist and if it is relevant to our current economic scenario as well?

'Zeitgeist' is a German word that refers to the 'spirit of the times.' It is the ethos of an age, and reflects the current feelings and beliefs, hopes and fears of society. I believe in the midst of this global meltdown, and particularly in the west, where the situation is grave, there is an overwhelming need to believe in the future and in the possibility of overcoming challenges. That is why a story like 'slumdog' which features a kid overcoming the most deprived cirumstances, has struck a chord with audiences throughout the world, who want to believe, that they too, will emerge victorious from their current economic woes.

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

So finally the unthinkable has happened. Tata Motors has acquired Jaguar Land Rover and one of the strongest symbols of British supremacy is now owned by a former colony. Reverse imperialism? Jokes apart, this is really a very welcome development, not because of jingoistic reasons, but simply because it shows that India is finally a global player, able to match steps with the best of them. Of course, this is not the first time this has happened (think Corus, Stokes Forging, Tetley Tea), but somehow, maybe due to the aura of the brand involved (Jaguar/Land Rover), the impact seems to be stronger. This will also go a long way in emboldening others, who will now go forth and grab whatever there is on offer, the logic being 'if Tata can do it, why not us?’
 

These takeovers also drive home a point - if you think you are the best (or can be the best) in a given field, then you should look at players who are better than you, rather than gunning for the smaller fish in the pond. That way, your trajectory will always point north. Also, this way a company gets the latest technologies, which help in giving better value to customers and, of course, to shareholders. Some naysayers would point out that the brand is in its sunset years and not worth the price, but what one needs to remember is that the advantage is not in just absolute terms, but goes much beyond that. Sure, some of these takeovers have not been successful (both Ford and BMW have been owners of JLR in part or full), but this has never reflected badly on the company taking over.

 

I hope we see many more such takeovers, which will keep the flag of India Inc. flying high.

Do keep the feedback rolling in about what you think.

Note: Jaguar was initially named 'Swallow Sidecar Company' and they were in the business of refurbishing and overhauling motorcycles and sidecars of other makes. From there, they moved to developing their own automotive engine and coaches (car bodies)

At M&M, we can clearly see the connection between our brand image and that of our country. Just like our country, we as a company have broken the shackles of a stereotypical image and are being taken seriously as a global player. Not to forget that we started off almost in the same time period - when our country attained independence. Both of us have transformed a lot in the past six decades and have shown great potential and fuel to go further.

As a kid I had a great fascination with the globe. Observing it and trying to figure out details about strangely named places, it was all about giving food to my thoughts...to my dreams.

What is it that fascinates a business-conglomerate to go global? Business, growth, money... some will even say fame and brand building. But then there is also another aspect to it - recognition. Recognition for both the company itself and for the country it belongs to. The very fact that a company calls itself a 'German-Multinational' or a 'Japanese-Multinational' reflects this point. You may call it some sort of symbiosis, where the company uses its country as an initial brand-ambassador and then thrives to become a brand-ambassador for the country itself. For example, one of the first thoughts that came to mind on mentioning Japan is its electronics heavyweights. For automobiles pioneers it's Germany and Italy.

MNC Products as a reflection of Culture and Ethos

The Scorpio: Mahindra's global SUV

Mahindra & Mahindra is experiencing the same in the automotive sector with its increasing global presence. Today, when we enter a new global market, we are seen as an Indian company. A company that brings, with its name, the images of Indian culture, colours, tradition, hospitality and even music and spices. M&M today stands as one of the few foremost flag bearers of a changing India. An India that is developing into a major superpower, an India that is ambitious and an India that is now prepared to embrace the world with open arms.

Catching the attention of customers in a new market can be a tricky deal and converting that attention into sales is a step further. The question is, "what is it that a customer searches for in a multinational product?" It's the cultural footprint of a different country, a country that holds a specific image in some part of his brain. He looks for the values that the company brings with it.

Being an Indian company we have the biggest advantage of our country's image as a very hospitable country, a country where one gets welcomed with a lot of warmth and love. We are also seen as a country with much diversity, shaping the expectation of getting something very different from what other companies and countries have to offer.

Former Under-Secretary-General of the United Nations, Dr. Shashi Tharoor, addresses students and faculty of the Mahindra United World College of India (MUWCI) in Pune, India. Dr. Tharoor was a special guest at the inauguration of the Van Vihar Biodiversity Park & Reserve which aims to preserve and protect the flora and fauna of the Western Ghats region.

India’s economy has grown at double to triple the rate of the United States and the European Union in the past five years, sparking a reverse brain drain from countries that lured away many of its best engineers, computer scientists and doctors in earlier years.  These coconuts – brown on the outside, white on the inside – are drawn back to India by the rapidly growing economy and increasingly world-class lifestyle. 

And then there’s the cappuccino crowd, which novelist and Financial Times journalist Gautam Malkani describes as “outwardly white and brown inside.”  Sue of Rang De Basanti is the standard-bearer of this group, but these days there are plenty of Americans and Europeans attracted less by India’s remarkable history than by its exceptional economic prospects.  Institutions and individuals from the West are entering India in ever greater numbers, drawn by a dynamic economy that is only beginning to tap into its vast human and natural resources and its rapidly growing consumer base.  I’m one of a dozen Americans who have joined Mahindra & Mahindra’s offices in India over the past three years to participate in Mahindra’s growth story. 

It’s time to think beyond the traditional paradigm of foreigners as customers and start thinking of them as colleagues.  I’ll focus on what I know: working with foreigners in the first ten years of their career.  How can India Inc. derive the most value from them? 

1. Learn to hear ‘no’.  Many Americans and Europeans are allergic to hierarchy and are quick to speak their mind.  They may come off as arrogant or rude to colleagues who haven’t worked for them before, but their objective is productive – to move projects forward on schedule, to play devil’s advocate, and to question and cast aside weak ideas.  Don’t take offense, but be prepared to listen and respond to their analysis.

2. Philosophy is the new finance.  India’s education system separates students into clear-cut tracks based on their core discipline, while most Americans receive a liberal arts education that exposes them to a wide variety of disciplines.  Plenty of history and philosophy majors in the US go on to prestigious roles in investment banking and management consulting after graduation.  Likewise, Americans and Europeans working in India may not have paper qualifications in business or finance, but you can take advantage of their versatile skills by engaging them across strategic, financial and technical domains.

3. Get to know your customer.  A foreign employee can be a fount of wisdom on culture and communication when you need to understand customers, suppliers or partners from the same region.  They naturally have a more intuitive understanding of what drives preferences and decision-making.  Keep in mind that there are limits to the insight created by a shared culture.  If I wanted to size the market for SUVs in Spain I’d much rather have a market research consultant on hand than a Spaniard.

If this mini-treatise on working with Westerners isn’t relevant to you now, give it a few years.  The cappuccino trend is here to stay, bolstered by the world’s new flatness and the rapid growth of Asian economies.  When you do end up working with one of us, don’t get frustrated – get some value out of it.