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It is a privilege for me to address this first letter to you as Chairman of M&M.
M&M has always had a close and cordial bond with its shareholders, and this is a tradition I am delighted to continue. Thank you for the support you have always rendered to the Board, and the encouragement and affection you have showered upon me personally. I look forward to a long and rewarding association with all of you.
When I took over as Chairman last year, someone asked me what would change. My first off-the-cuff reaction was, nothing - nothing would really change. I would continue to have the operational responsibility I have been holding since 1997. Energising the organisation would still continue to be the most important part of my job. I would still have to earn my salary by looking into the crystal ball of the future and trying to steer the organisation through the shoals and opportunities lying ahead of us.
But on deeper reflection I realised that something would indeed change and change very fundamentally. There is a story of how US President Harry Truman had a plaque on his desk that said ''The buck stops here.'' Well, an identical plaque has now earned a place on my desk. While I always hope to enjoy the blessing and guidance of our Chairman Emeritus, and the direction of the Board, the hard fact is that, for the first time, the buck now stops with me.
And with the stopping of the buck, I am acutely aware that the task of preserving, protecting, nurturing and growing the finest attributes of the Mahindra Group has devolved on me. There are many important things that have to be preserved and strengthened. For me, one of the most critical is good governance. Good governance has always been the hallmark of the Group. Measures to ensure high standards of governance were implemented within the company long before they were mandated by law. It is one of my topmost priorities to ensure that this great tradition of impeccable governance continues and strengthens and that the Mahindra Group preserves and enhances its reputation for clean administration, fair dealing and transparency.
I am also acutely aware that the Mahindra Group has a precious legacy of values, social consciousness, and integrity that has come down to us from the days of the founders, and is personified by our Chairman Emeritus. This legacy is not just a source of great pride; it is almost the birthright of our shareholders, employees, partners and other stake holders. It is a legacy I pledge to strengthen and deepen.
And thirdly, I pledge performance. Performance has also been the hallmark of the Mahindra Group in the 21st century. Gross Group revenues have grown more than 12 times. Group profits by a whopping 60 times. The Group market cap has grown from a couple of hundred million dollars to 19 billion dollars today. The number of Business-to-Consumer (B2C) businesses has tripled from 5 to 15 plus. At that time, we had about 19000 associates.
Now, Group wide, we employ over 1,50,000 people. At that time, we had a handful of foreign associates. Today, we employ people from 11 countries. For decades we were known as a predominantly manufacturing company. Now we are a multi-sectoral Group. The global footprint has expanded. At that time, we had just four businesses abroad. Now, the Group presence extends to more than a hundred countries. Today, we are a global Group that is all about using technology and innovation to empower people everywhere to succeed. It has been an era of innovation and growth, and I feel incredibly fortunate to have been a ''hands-on'' part of it.
This is the performance that I pledge to keep up and improve upon. And I say that we will better it with a certain level of confidence, for many reasons.
First, because I believe that we have created an ecosystem within the organisation where human potential can flourish. I am often asked what my vision is for the future of the Mahindra Group. I don''t think I would describe my vision in monetary terms. Rather, I would say that my vision for the company is that it should be a workplace where entrepreneurship can thrive. A place where people are empowered to achieve everything they are capable of achieving. If I may be permitted to wax poetic, my vision would be to create a fertile field of dreams where people can sow the seeds of their talent and nurture it to full flower. If we provide this ecosystem, people will do well, people will harness their talents to the company''s cause, and the results will follow.
Second, we will do well because we have a secret weapon. We are purpose-driven. We have a larger purpose in the form of our Rise philosophy. A colleague has put up a story on our internal website, which tells of a journalist in the 1960''s (when America was striving to be the first country to put a man on the moon) who saw a man driving a truck in the NASA compound. He asked him what his job was. The truck driver replied, "My job is to put a man on the moon". I can''t think of a better example of a purpose-driven person. Here was a humble truck driver - who didn''t see his job as driving a truck. He saw himself as part of a larger and much more audacious mission - putting a man on the moon. The Rise philosophy also does that to people. People in the Mahindra Group too, see themselves as working for something much larger and more compelling than profits or even their own advancement. They see their job as helping people everywhere to Rise.
And the third reason I am confident we will maintain and better our performance, is that we have the audacity of ambition to drive us. Around the end of the first decade of the 21st century, the top 500 managers of the Mahindra Group worldwide asked themselves, "What do we want to achieve by the end of the second decade? Where do we want to be in 2021 ?" The answer, not surprisingly, was not couched in monetary terms. They didn''t want to be, say, a 50 billion dollar global Group. Rather, ''Aspiration 2021'' which they co-created after intense debate, says "We will be among the top 50 most admired Groups in the world by 2021; and we will do this by helping people everywhere, to Rise". Considering that we are today still a predominantly India-based Group, that is a very bold aspiration indeed in a ten year time frame. But knowing what our people are capable of, it would be no surprise, if we do achieve it.
I take over at a difficult time. If one were to go by the headlines and talking heads on TV, there seems to be nothing but bad news all around. Political dramas are unfolding everywhere. A controversy a day seems to be the new normal. The share market is volatile and the macroeconomic statistics seem to be heading south. Contrary to the prevailing pessimism however, I continue, as always, to be bullish on India.
The cacophony of democracy in action tends to drown out the good news - and there is much good news. Good news, such as inflation is moderating. Good news, in that the fiscal deficit is now getting the focus it was crying out for. Good news, such as the fact that while India''s growth rate has slowed down, it is still higher than growth rates almost anywhere else in the world. The even better good news is that population growth rates are declining, and as a result, per capita income growth rates are accelerating.
Yes, there are good things happening from an economic perspective, and what we require now, is to remove the bottlenecks to growth, to accelerate investment, especially in areas like infrastructure and manufacturing, which have a multiplier effect on growth, and to implement reforms faster and more visibly.
But my real cause for optimism is due to dramatic changes in the social arena. I believe we are entering into a new Age of Accountability.
The dramatic growth in digital and social media has provided the rising, educated middle class with a potent weapon to demand accountability from public figures. Those in a position of public responsibility - politicians, bureaucrats and corporations - are seeing a mirror held up to them, and hearing the increasingly vociferous calls for meeting expectations for an improved quality of life.
At the risk of being accused of naivete, I believe public figures will have to heed this call for transparency and for higher levels of performance of their duties. As this evolution of accountability takes shape, I believe India will once again become the cynosure of global attention and investment. The much-touted demographic dividend will finally come through and India should return to a much higher trajectory of growth.
As I write this, the rain is pelting down outside, and we are celebrating the highest rainfall in 22 years. After the long hot summer, the rains always bring welcome relief and that is why they are considered so auspicious. I am optimistic that these rains are a good augury for India and the future.
I am aware that I have taken over at a time of substantial macroeconomic strain. In fact, it is a joke within our Group that I always seem to take on a new assignment in the midst of a crisis. When I joined MUSCO in 1981, the steel industry was in crisis. When I became Dy. MD in 1991, M&M faced a challenge to its very existence, with the onset of liberalisation. When I became MD in 1997, Asia was in economic crisis, and India was feeling the effect. And since I have become Chairman, Indian business has been under siege due to global and domestic factors. So, I can humbly claim to be familiar with crises.
Today, the greatest challenge we face, is to achieve continuous growth in a discontinuous world. It is a tough task, but I believe we are up to the challenge. I believe we have the right combination of ambience, altruism and ambition to do great deeds and to continue performing in the future, as we have in the past. I do not underestimate the difficulties of doing this, but with your support and blessings, we will give it our best shot, and I am confident we will succeed.
With best wishes,
Anand G. Mahindra
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