Vice Chairman & Managing Director, Mahindra & Mahindra Ltd.
“My penchant is for building brands that find a place in the customer’s mind and for developing businesses that live or die by how well they connect with the consumer.”
Anand Mahindra considered going into the movie industry after Harvard College. Instead, he opted for HBS and then a job in Mumbai with his father at Mahindra Ugine Steel (MUSCO). Soon after he arrived, the young Harvard MBA was called on to restructure and diversify MUSCO. That was the preparation he needed to join utility vehicle and tractor maker Mahindra & Mahindra in 1991. Anand Mahindra has been leading M&M’s charge into the ranks of the world’s global corporations ever since.
Established in 1945, Mahindra & Mahindra Ltd. (M&M), named after one of India’s best-known business families, got its start selling Jeeps before segueing into the manufacture of utility vehicles and tractors for the Indian market in the 1950s. Today, it is a $6.6 billion enterprise involved in many activities, including information technology, logistics, infrastructure development, and financial services, as well as automotive and farm equipment. The purview of all these companies is now the world—part of a well-articulated philosophy of diversification and globalization implemented by Anand Mahindra in 1994, three years after he was appointed deputy managing director of M&M, founded by his grandfather and granduncle.
The history of M&M parallels the economic history of India—from post–WWII entrepreneurial activity to the socialistic slowdown that began in the 1960s to the reopening of the Indian market in 1991. As foreign multinationals prepared to renew their efforts in the country, Mahindra knew that M&M would have to not only reorganize but look beyond India’s borders. “When the global market comes to your doorstep,” he observes, “if you don’t have the same advantages—the synergies and scale that global networks bring—you’re not going to be safe at home.”
The organizational architecture Mahindra created established a “federation” ofcompanies (now numbering 98) grouped in “sectors” (now eight) headed by presidents with general management responsibilities. Unlike a conglomerate, each sector has one flagship company with its own listing on the Bombay Stock Exchange. “The model resembles a private equity business,” notes the elegant and eloquent Mahindra. “From the corporate center, we provide services—financial skills and help with branding, for instance—and monitor the financial targets very closely, but we are essentially allowing professional executives to do their job.”
To transform an old-line Indian firm into a global powerhouse, Mahindra has also made the most of joint ventures, initially a 1993 deal that enabled Ford to manufacture and market the Escort in India. “We were then making open-top Jeeps and didn’t have a clue how to make a mass-market car,” he says. “Thanks to a decadelong alliance with Ford, we’ve learned how to do that.” In 2002, M&M launched its own sports utility vehicle, the Scorpio, which is now being exported to countries such as Italy, Russia, and South Africa. A hybrid version will hit U.S. showrooms within a few years, a prime example of Mahindra’s insistence on innovation.
A recent limited joint venture with Renault to manufacture the French carmaker’s low-cost sedan, the Logan, is now exploring ways to expand the boundaries of the alliance to include new products and markets. “Going global is terribly complex and challenging,” Mahindra explains. “Companies from emerging markets need to be eclectic in their alliances, so that they can learn as much as possible about things like technology, procurement, and marketing.”
M&M made news recently with its entry into the media business, primarily film production. “I have to tell people that this is not the fulfillment of a lifelong dream,” smiles Mahindra, who majored in film as a Harvard undergraduate. “It’s a logical step, since movies are one of India’s most exciting growth areas.” That said, Mahindra, an inveterate film buff with a host of other interests, wouldn’t have to look far for help if he ever wanted to produce his own feature. His wife is an accomplished writer and magazine editor. One daughter took time off from college to attend the New York Film Academy, while the other is a student at Parsons, a design school in Manhattan. For a Renaissance man who has a long list of “hits” in business, this venture would undoubtedly win rave reviews too.