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(originally published by Booz & Company)


A Family-owned Business Goes Global

As director of human resources (and CEO of a prominent subsidiary), Santrupt Misra oversees the Aditya Birla Group’s strategy for cultural change as it steps out onto the world stage.

Named the best employer in India in a 2007 study, the Aditya Birla Group is also one of the hardest-charging multinational corporations emerging from that country. The Birla Group produces and sells such products as fiber, chemicals, cement, metals, yarns and textiles, apparel, fertilizer, and carbon black (a petroleum-based material used in the manufacture of rubber and plastic). It is a US$30 billion conglomerate operating in about 25 countries, with 60 percent of its revenues now coming from outside India. Its current director of human resources, Santrupt Misra, is credited with developing pay, promotion, and professional development processes that have helped transform this insular family-led company into an outward-facing global enterprise.

The origins of the Aditya Birla Group date back to the 1850s, when it was the Birla family’s trading company. In the 20th century, then chief executive Ghanshyam Das (G.D.) Birla was one of the country’s wealthiest industrialists and a close associate of Mohandas (Mahatma) Gandhi. Starting in the 1970s in Southeast Asia, and with accelerating pace through the mid ’90s, Chairman Aditya Vikram Birla (G.D.’s grandson) expanded the company outside India. He said that his life’s ambition was to create a world-class Indian multinational, “taking India to the world.” In 2005, after Aditya’s untimely death, his son Kumar Mangalam Birla was appointed chairman.

Santrupt Misra had already been recruited by Kumar Mangalam Birla from Hindustan Lever in 1996. He was now asked to lead a complete overhaul of the group’s human resources policies and practices to restore confidence and foster global growth. Misra moved quickly to develop a variety of merit-driven personal growth and talent management processes.

In 2009, Misra was appointed CEO of the group’s carbon black business. Previous to this, he was one of the senior M&A leaders at the Aditya Birla Group, facilitating a series of acquisitions of European and North American companies. For example, in 2007, the Birla Group’s Hindalco Industries Ltd. subsidiary purchased the Atlanta-based aluminum company Novelis Inc. for $6.4 billion. The strategic intent was to combine Novelis’s aluminum rolling assets with Hindalco’s growing primary aluminum operations and its downstream fabrication capabilities, thus enabling it to expand in high-growth emerging markets. At the time, this was the second-largest foreign acquisition ever made by an Indian company, following the Tata Group’s purchase of Corus Steel.

Interviewed at his office in Mumbai, Misra reflected with strategy+business on the Aditya Birla Group’s continuing imperative to sustain world-class performance, and to create the kind of multinational culture that makes this possible.

S+B: The Birla Group has had operations outside India for decades. How is this new phase of international growth different, and how is it continuing to change the company?
MISRA: Our late chairman, Aditya Birla, was a visionary. Long before globalization was a fashionable word, he saw that there was opportunity outside India, and he went for it in an entrepreneurial way. He sent one or two men to live and find opportunities in Southeast Asia, and to build on them. We are continually trying to maintain and strengthen that spirit. We will send somebody to South Africa, for example, and say, OK, find opportunities for us.

But there is much more to it than that. We are learning to think more in terms of customers and vendors outside India, and benchmarking and collaborating outside India. We recently ran a leadership development workshop at corporate headquarters to discuss what it means to have a global mind-set. Gautam Ahuja, a professor of strategy at the University of Michigan’s Ross Business School, led the discussion. Many of our senior leaders from around the world attended.

S+B: What in your view is a “global mind-set”?
It means thinking in different frameworks rather than within one single narrow framework. As we grow outside India, we must be more aware of different regional perspectives. For example, even before the global recession, the U.S. economy was growing more slowly than India’s annual growth of 7 to 8 percent. We think some targets are achievable, but our colleagues in other parts of the world may think they are a stretch. When they ask how we expect to achieve a goal in their region, we have to understand why they are doubtful — but also start wondering, from our perspective, how to accomplish it.

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