India's 'intrapreneur'

A M Naik created an exemplar of professional management

In a country dominated by family-owned and -managed companies, A M Naik’s long stewardship of engineering giant Larsen & Toubro (L&T) stands out as an exemplar of professional management. When he stepped down from chairmanship on September 30, a post he had held since 2003, he was widely feted for turning a solid engineering company with a turnover of Rs 6,883 crore in 1999, when he took charge as managing director and chief executive officer, into a Rs 1.12 trillion behemoth, a byword for reliability in complex projects from infrastructure to defence manufacture, in India and some 30 other countries. In the process, he managed to transform a company founded by two Danish engineers into a proud symbol of Indian corporate and engineering capabilities. It is no surprise that he has been the recipient of countless awards, including the Padma Vibhushan. But there are broader and salutary management lessons beyond tenacity and longevity to be drawn from this earthy doyen of India Inc who revelled in his rural roots.

Mr Naik, 81, is a self-confessed workaholic, harbouring a deep passion for a company in which he has a 0.04 per cent shareholding. In a 2013 interview to Business Standard, he said L&T was his hobby, anything outside that he considered work. To this end, he drove the company — and its senior executive team — to maximise all the opportunities that a rapidly growing economy presented, from shipbuilding to metro-rail projects, aerospace, information technology and finance. His shrewd ability to spot opportunities early offer powerful examples of a quality, rarely seen in Indian management, of “intrapreneurship”, or the ability to act entrepreneurially within a professionally run company. He was in a good position to do so, having spent nearly all his working life in L&T, which he joined in 1964 as a junior engineer on the shop floor at a monthly salary of Rs 670.

Like many business people of his generation, Mr Naik wears his patriotism on his sleeve — or rather lapel, to which a brooch with an Indian flag was pinned. After the court relaxed rules on flying the Indian flag, he ordered that it be flown from all L&T offices and factories. Overt flag-waving could have been considered the necessary obeisance a corporate chieftain must pay to the political dispensation that still plays a commanding role in the economy. But Mr Naik had built sufficient authority to feel free to criticise the government of the day and offer unsolicited advice too. Though he broadly agrees with the current government’s policies, he has pointed to the slow pace of job creation, for instance.

It is fitting that in his new role, Mr Naik will, apart from formidable philanthropic activities, remain chairman of the Larsen & Toubro Employee Trust (LTET), which he created to ring-fence the company from hostile corporate raiders, having watched up close the management thwarting two takeover attempts, one in the late 1980s and the other in the 2000s. The LTET is the largest shareholder in L&T. Often criticised for his reluctance to relinquish control, Mr Naik has been succeeded by S N Subrahmanyan, whom Mr Naik is said to have groomed for three years for the top job. That L&T’s new chairman emeritus would have approached this task with due diligence cannot be doubted. But his successor will still have outsize shoes to fill.