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 atradition I am delighted to continue. Thank you for the support you have always renderedto the Board and the encouragement and affection you have showered upon me personally. Ilook 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 firstoff-the-cuff reaction was nothing - nothing would really change. I would continue to havethe operational responsibility I have been holding since 1997. Energising the organisationwould still continue to be the most important part of my job. I would still have to earnmy salary by looking into the crystal ball of the future and trying to steer theorganisation through the shoals and opportunities lying ahead of us.
But on deeper reflection I realised that something would indeed change and change veryfundamentally. There is a story of how US President Harry Truman had a plaque on his deskthat said 'The buck stops here.' Well an identical plaque has now earned a place on mydesk. While I always hope to enjoy the blessing and guidance of our Chairman Emeritus andthe direction of the Board the hard fact is that for the first time the buck now stopswith me.
And with the stopping of the buck I am acutely aware that the task of preservingprotecting nurturing and growing the finest attributes of the Mahindra Group has devolvedon me. There are many important things that have to be preserved and strengthened. For meone of the most critical is good governance. Good governance has always been the hallmarkof the Group. Measures to ensure high standards of governance were implemented within thecompany long before they were mandated by law. It is one of my topmost priorities toensure that this great tradition of impeccable governance continues and strengthens andthat the Mahindra Group preserves and enhances its reputation for clean administrationfair dealing and transparency.
I am also acutely aware that the Mahindra Group has a precious legacy of values socialconsciousness and integrity that has come down to us from the days of the founders andis 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 stakeholders. It is a legacy I pledge to strengthen and deepen.
And thirdly I pledge performance. Performance has also been the hallmark of theMahindra Group in the 21st century. Gross Group revenues have grown more than12 times. Group profits by a whopping 60 times. The Group market cap has grown from acouple of hundred million dollars to 19 billion dollars today. The number ofBusiness-to-Consumer (B2C) businesses has tripled from 5 to 15 plus. At that time we hadabout 19000 associates.
Now Group wide we employ over 150000 people. At that time we had a handful offoreign associates. Today we employ people from 11 countries. For decades we were knownas a predominantly manufacturing company. Now we are a multi-sectoral Group. The globalfootprint has expanded. At that time we had just four businesses abroad. Now the Grouppresence extends to more than a hundred countries. Today we are a global Group that isall about using technology and innovation to empower people everywhere to succeed. It hasbeen 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 wewill better it with a certain level of confidence for many reasons.
First because I believe that we have created an ecosystem within the organisationwhere human potential can flourish. I am often asked what my vision is for the future ofthe Mahindra Group. I don't think I would describe my vision in monetary terms. Rather Iwould say that my vision for the company is that it should be a workplace whereentrepreneurship can thrive. A place where people are empowered to achieve everything theyare capable of achieving. If I may be permitted to wax poetic my vision would be tocreate a fertile field of dreams where people can sow the seeds of their talent andnurture it to full flower. If we provide this ecosystem people will do wellpeople 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 havea larger purpose in the form of our Rise philosophy. A colleague has put up a story on ourinternal website which tells of a journalist in the 1960's (when America was striving tobe the first country to put a man on the moon) who saw a man driving a truck in the NASAcompound. He asked him what his job was. The truck driver replied "My job is to puta 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 himselfas part of a larger and much more audacious mission - putting a man on the moon. The Risephilosophy also does that to people. People in the Mahindra Group too see themselves asworking for something much larger and more compelling than profits or even their ownadvancement. They see their job as helping people everywhere to Rise.
And the third reason I am confident we will maintain and better our performance isthat we have the audacity of ambition to drive us. Around the end of the first decade ofthe 21st century the top 500 managers of the Mahindra Group worldwide askedthemselves "What do we want to achieve by the end of the second decade? Where do wewant to be in 2021 ?" The answer not surprisingly was not couched in monetaryterms. They didn't want to be say a 50 billion dollar global Group. Rather 'Aspiration2021' which they co-created after intense debate says "We will be among the top 50most admired Groups in the world by 2021; and we will do this by helping peopleeverywhere to Rise". Considering that we are today still a predominantly India-basedGroup that is a very bold aspiration indeed in a ten year time frame. But knowing whatour 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 headson TV there seems to be nothing but bad news all around. Political dramas are unfoldingeverywhere. A controversy a day seems to be the new normal. The share market is volatileand the macroeconomic statistics seem to be heading south. Contrary to the prevailingpessimism 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 ismuch good news. Good news such as inflation is moderating. Good news in that the fiscaldeficit is now getting the focus it was crying out for. Good news such as the fact thatwhile India's growth rate has slowed down it is still higher than growth rates almostanywhere else in the world. The even better good news is that population growth rates aredeclining and as a result per capita income growth rates are accelerating.
Yes there are good things happening from an economic perspective and what we requirenow is to remove the bottlenecks to growth to accelerate investment especially in areaslike infrastructure and manufacturing which have a multiplier effect on growth and toimplement reforms faster and more visibly.
But my real cause for optimism is due to dramatic changes in the social arena. Ibelieve we are entering into a new Age of Accountability.
The dramatic growth in digital and social media has provided the rising educatedmiddle class with a potent weapon to demand accountability from public figures. Those in aposition of public responsibility - politicians bureaucrats and corporations - are seeinga mirror held up to them and hearing the increasingly vociferous calls for meetingexpectations for an improved quality of life.
At the risk of being accused of naivete I believe public figures will have to heedthis call for transparency and for higher levels of performance of their duties. As thisevolution of accountability takes shape I believe India will once again become thecynosure of global attention and investment. The much-touted demographic dividend willfinally 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 highestrainfall in 22 years. After the long hot summer the rains always bring welcome relief andthat is why they are considered so auspicious. I am optimistic that these rains are a goodaugury for India and the future.
I am aware that I have taken over at a time of substantial macroeconomic strain. Infact it is a joke within our Group that I always seem to take on a new assignment in themidst of a crisis. When I joined MUSCO in 1981 the steel industry was in crisis. When Ibecame Dy. MD in 1991 M&M faced a challenge to its very existence with the onset ofliberalisation. When I became MD in 1997 Asia was in economic crisis and India wasfeeling the effect. And since I have become Chairman Indian business has been under siegedue 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 adiscontinuous world. It is a tough task but I believe we are up to the challenge. Ibelieve we have the right combination of ambience altruism and ambition to do great deedsand to continue performing in the future as we have in the past. I do not underestimatethe difficulties of doing this but with your support and blessings we will give it ourbest shot and I am confident we will succeed.
With best wishes
Anand G. Mahindra