Business cycles are shortening because of changes in technology and consumer preferences, and the Aditya Birla Group has to grapple with the challenge of ensuring continuous reinvention, its Chairman Kumar Mangalam Birla said on Tuesday.
Birla, who heads the diversified USD 60 billion conglomerate having interests in metals to telecom, also touched upon the proliferation of startups in the business landscape, saying there are no shortcuts to business building and made it clear that there exists a thin line between “hustle and hubris”.
“Changes in technology, and evolving consumer needs, are creating ever shorter business cycles. For a group like ours, a unique challenge is to harness the trust and stability that comes from longevity, while ensuring that we can continuously reinvent ourselves,” Birla said.
In his New Year note, Birla cited the example of the sequel to over three-decade old movie Top Gun that grossed USD 1 billion within a month of its release in 2022, to drive home the point about reinvention and building for the future.
He said companies across corporate India will be asked “pressing questions regarding their own futures”, the unique formula they possess to harness “historic moats formed by brand power, distribution might, or technology prowess” with a forward-looking product pipeline, consumer relevance and an agile, young workforce.
They will also be asked about their bets to translate the short-term fads into sustainable advantage, he said, admitting that he does not have the answers to all these questions.
The Aditya Birla Group is relying on some experiments and a purpose statement was adopted in 2022 to take on these questions, he said.
Birla welcomed the “explosion of new business building” on the back of capital availability and young talent, but also flagged some concerns.
“There is much to be celebrated and learnt from the raw energy and hustle of many of these new ventures in the startup ecosystem. At the same time, it’s also increasingly clear that there is a thin line between hustle and hubris,” he said.
One needs to build good teams and be unafraid to get new talent, create a culture where values matter more than slogans, own the offensive moves and have the core metrics of operating profits, gross margins, and cash flows in mind to balance between the two, he added.
Asking entrepreneurs to build for the long haul, he said, “Unfortunately, there have been one too many examples recently of teams that have embraced shortcuts. Where compromises have been made in the interest of growth. And where alarms are set off too late.” He said the group companies are also investing in green energy, the circular economy and sustainable materials, in line with the bold bets in energy transition done by the country.
He said India is a “clear choice” for global corporations as they start to look at options in Asia as part of their “China+1” strategies.
“Think of a country that combines economic might, a large working age population, demographic dynamism, entrepreneurial energy, robust democracy and diversity. Add to this a pivotal position in current global geopolitics. That country is India,” he said. PTI