Born: June 14, 1967Achievement: Chairman of the Aditya Birla Group; Vhosen as Ernst & Young Entrepreneur of the Year - India in 2005

Kumar Mangalam Birla is the Chairman of the Aditya Birla Group. The group is India's third largest business house. Major companies of Aditya Birla Group in India are Grasim, Hindalco, UltraTech Cement, Aditya Birla Nuvo and Idea Cellular. Aditya Birla Group's joint ventures include Birla Sun Life (Financial Services) and Birla NGK (Insulators). The group also has its presence in various countries such as Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, China and Australia.

Born on June 14, 1967, Kumar Mangalam Birla spent the early of his life in Calcutta and Mumbai. He is a Chartered Accountant and did his MBA (Masters in Business Administration) from the London Business School, London. Kumar Mangalam Birla took over as Chairman in 1995, at the age of 28, after sudden demise of his father, noted industrialist Aditya Birla, after whom the group is named.

When Kumar Mangalam Birla assumed the mantle at the Aditya Birla Group, Doubts were raised about his ability to handle a giant business house with interests spanning viscose, textiles and garments on the one hand and cement, aluminium and fertilisers on the other. But Kumar Mangalam proved his skeptics wrong. He brought in radical changes, changed business strategies, professionalised the entire group and replaced internal systems. Kumar Mangalam reduced his group's dependence on the cyclic commodities sectors by entering consumer products.

Under Kumar Mangalam Birla's leadership, the Aditya Birla Group, apart from consolidating its position in existing businesses, also ventured into sunrise sectors like cellular telephony, asset management, software and BPO.

Kumar Mangalam Birla also holds several key positions on various regulatory and professional boards, including chairmanship of the advisory committee constituted by the ministry of company affairs for 2006 and 2007, membership of the prime minister of India's advisory council on trade and industry, chairmanship of the board of trade reconstituted by the union minister of commerce and industry, and membership of the Central Board of Directors of the Reserve Bank of India.

Kumar Mangalam Birla has won several honors. Major among them include The Business Leader of the Year (2003) by The Economic Times, Business Man of the Year - 2003 by Business India, and The Ernst & Young Entrepreneur of the Year - India in 2005.

Are we doing everything we can to help people be the best they can be?" asked Birla in the Q203 issue of The Smart Manager. The question is close to his heart. Since he took over the reins at the Birla Group he has focused on fine tuning the group's talent pool. If this meant taking hard decisions Birla did not shy away. More than 350 senior managers left the group. Some through natural attrition, others through counseling, leaving space for new faces and new talent.

"Management means attracting talented people, nurturing them, developing them, and giving them space," asserts Birla, "decisions need to be made at every level and decisions need to be quick. So, we have to spot, incubate and groom talent at every level of the organization, because more people need to be making high quality decisions."

To build this culture in the group, Birla has created a system based on meritocracy. His HR initiatives fall under three broad heads: learning and relearning, performance management and organizational renewal. For example Gyanodaya, the group's learning center falls in the first category. It helps in the transfer of best practices across group companies thus sharpening the group's competitive edge. The training calendar is accessible to employees via Aditya Disha, the group wide intranet, and the teaching programs consist of a mix of classroom, outreach, and e-learning initiatives.

Birla has also instituted ‘The Organisational Health Survey (OHS)’ which tracks the satisfaction levels of 8,670 managers across the group. A direct result of such initiatives is that today his brand as an employer has enhanced significantly, allowing Birla to access to some of the best minds and talent available in the country. The group is considered among the top 20 preferred employers in Asia.

For performance management Birla instituted the Aditya Birla Sun awards an annual internal awards system. Here each group company makes an open presentation on their successes and failures to a group of 400 managers drawn from different group businesses. This leads to information sharing and also encourages healthy competition in the group. Birla believes that star performers need appreciation and recognition. "It is very important for people who are doing well to be told they are doing well," he says. He insists that performance levels jump considerably higher after a person/team receives an award. The Aditya Birla award is for teams while the chairman's award is for individuals.

A group company that has won numerous such awards is Hindalco. Birla has transformed Hindalco into a globally competitive non-ferrous metals company. The first step was to merge the copper division of Indo Gulf with Hindalco unifying the group's non-ferrous metals business under one company with 40% market share. He acquired 74.6 % equity stake in Indal for Rs 10 bn to make it a wholly owned subsidiary of Hindalco. This made him the largest producer of aluminum in India and today Hindalco-Indal command a 70% market share.

Having made Hindalco competitive now Birla is pursuing market growth. He recently entered the Rs 2.50 bn branded foil market. Within a year of launch Hindalco captured a 40% market share and put a robust distribution in place. Last year Hindalco launched of as many as five branded products. The launch of "Aura" Alloy Wheels in early 2002, uniquely positioned as "dress code for your car", was followed by the launch of its kitchen utility range - Freshwrapp aluminium foil and Freshpakk semi-rigid containers, and Everlast roofing sheets. Hindalco also introduced "Al Planet", a unique exhibition format highlighting products from the secondary aluminium industry.

For organic growth Birla has embarked on an Rs18 bn brownfield expansion at Hindalco's integrated complex in Renukoot to increase aluminum metal capacity from 100,000 TPA to 342,000 TPA. This will ensure Hindalco's leadership position in the domestic market and improve its export markets as well.

But while Birla was revamping Hindalco, a move towards untangling the cross-holdings among group companies, a legacy of the 'licence raj', was also initiated. He unified his diverse companies under the Aditya Birla Group head. "If one were to encapsulate it (the group strategy) in a single word - the dominant strategic theme over the past four years has been consolidation," says Birla.

The process was threefold. Birla rearranged the companies, consolidated market presence in the different industries and then went on an acquisition spree to further strengthen leadership position. The result is a streamlined group with all aluminium companies merged under Hindalco, cement companies under Grasim, copper companies under Birla Copper and textiles and garments under Indian Rayon. Losing some of its loss making divisions also made Indo Gulf a debt free fertilizer company.

In the process the group's revenues have risen from Rs 72 bn to Rs 270 bn in eight years. "Our strategy dictates that we get out of businesses where we are bit players and strengthen the businesses where we have clear competencies, so that we get to the top of the league or consolidate our position there, as the case may be. This leads to a sharper and tighter business portfolio with our firepower being better targeted," says Birla.

Birla began with Grasim in 1995. His first step was to move the cement division of Indian Rayon to Grasim, thereby integrating the cement holdings within the group. Then in 2003 he acquired the cement division of Larsen & Toubro for Rs 22 bn increasing Grasim's total capacity to 31 MTPY. Today Grasim is the largest producer of cement in India and the seventh largest in the world. Similarly the copper division of Indo Gulf was divested and incorporated into Birla Copper. Then Birla increased the smelter capacity of Birla Copper from 100,00 to 150,00 MTPY and acquired two copper mines in Australia. Birla has been nicknamed the 'non-ferrous general' by the industry: his aluminium, copper, and carbon black units are ranked among the top three in their respective segments.

Indian Rayon also saw dramatic changes in portfolio. Its cement division was demerged. Then it acquired Madura Garments, the apparels and garments division of Madura Coats for Rs 2.6 bn in January 2000. This takeover gave Indian Rayon ownership of prominent brands -- Louis Philippe, Van Heusen, Allen Solly, Byford, Peter England and San Frisco. This marked a dramatic change in focus for the commodity based group. Though a major player in textiles, Birla had not been able to impact the branded menswear market. Building brands from scratch takes time as well as money, and the easiest way was to acquire an established one.

"The apparels business is one in which we want a leadership position. We will make a focused entry into the high-value, ready-to-wear segment. This acquisition as well as the acquisition of certain overseas brand rights has catapulted the group to the top of the league in the branded apparels market," says Birla. Today after a long period of negative growth Madura Garments has reported a 14.4% increase in revenues.

As a part of the restructuring process he sold Mangalore Refinery and Petrochemicals to ONGC. "The exit from MRPL indicates our firm resolve to rationalized the Group's portfolio of businesses with a view on the future, and also bears testimony of our commitment to a key group of stakeholders: our lenders," says Birla. The other major restructuring at Indian Rayon was demerging the insulator business into a new JV with Japanese company NGK to sustain leadership position and to acquire a global marketing network for the insulator business.

The consolidation initiative has allowed each company to emerge with a stronger balance sheet. The three largest companies in the group, Grasim, Hindalco, Indian Rayon, turned in a cumulative net profit of Rs 10.55 bn in FY03, a jump of 2.1% from FY02. Their combined sales increased to Rs 110.45 bn in FY03, an increase of 36% over the previous year. The group's overall revenues touched Rs 2,700 bn. Management styleBirla is his father’s son, but he has gradually developed his own personal management style. Commonalities include performance orientation, a strict eye for detail, close attention to budgets. Differences include more informal interaction with managers from top to bottom; a greater gap between personal and office life; and a strong emphasis on financial performance. For example he has replaced the old Parta system, which focused only on production with the Cash Value Added method, which emphasizes profitability, asset productivity and growth.

Birla is a firm believer in meritocracy. In his father's time, there were several marwaris in top management. Today there are plenty of non-marwaris. He places a lot of emphasis on HR and hired Santrupt Mishra from Hindustan Lever to spearhead the groups’ HR initiatives. A 360 degree feedback program that allows managers to question even Birla’s own leadership style and does away with the 'babu culture' prevalent in the group. But while on one hand Birla nurtures employees, on the other he is very careful about performance measures.

Birla is equally adamant about strict adherence to policies and procedures that have been discussed and approved. For example he introduced a retirement policy, similar to the one Ratan Tata introduced over at the Tata Group. While a cresendo of unhappiness was heard at Bombay House, peaceful silence reigned at Industry House. At Lever House, no doubt Vindi Banga is closely watching these events. Birla’s retirement policy saw 325 senior executives, between the ages of 62 and 65, step down after years of service. Though the policy was drafted in 2001, he took a year to implement. He then hired 190 young executives to infuse fresh and out of the box thinking in the group. "I think its been one of the most important decisions I've had to make," says Birla.

People skills are Birla's biggest strength. He has the ability to get on with both the old guard and the new turks. Soft spoken and insistent Birla likes to be directly involved. For example he sends individual notes to employees regarding their performance. Debu Bhattacharya currently the managing director of Hindalco and another former Hindustan Lever employee says, "it won’t be an exaggeration to say that I joined this group because of Mr Birla. For somebody who is from a highly respected MNC in the country, going to an Indian business house, I had a lot of reservations. My reservations came from that perception of the group. But I was so overawed with his simplicity, his genuineness, and his ability to explain simple things without trying to sell the job. If I had to take that decision all over again I'd do the same."

For all this Kumar is a low profile person, with a sense of humor and the rare ability to laugh at himself. This ease spills into his business relationships. For example the stalemate between the houses of Tata and Birla is now history. Ratan Tata recently invited Birla to join the board of Tata Steel, and Birla just as easily accepted.

Q1

It is a moot issue whether leaders are born or created but one thing is clear that there are certain character traits which help an individual to become a great leader. The last century has witnessed some of the greatest of all world leaders. These leaders have always shaped our society in past and will help to shape our future also. A great leader is always a boon to society.

What all it takes to become a good leader? Here are ten qualities which can make an individual a good leader.

1. A leader should be Commendable and Exemplary. A good leader should be trustworthy so that people can follow him. He/she should live his life with honesty and integrity. He/she should live a life such that nobody can question his character.

2. A good leader is always enthusiastic about the cause of the people. He/she must have the capability to see what is good or bad for the people in the long run. He/she approaches a problem in a holistic manner and never believes himself/herself different from his people and subject.

3. A leader believes in discipline. He/she follows an orderly manner and routine but still he/she is tolerant. He/she takes decision keeping emotions and personal matters aside.

4. A leader has excellent logical and analytical skills. He/she looks each and every aspects of the situation before arriving to any decision and never loses his/her temper in difficult situations. He/she should think positively in each and every situation.

5. A leader should always focus towards his goals, what he/she has envisioned for and promised to his people. He/she should take each and every decision keeping in mind the people and his subject.

6. A great leader is proactive and committed to excellence. He always maintains high standard and acts as an idol for his/her followers. His/her personal and public life both are remarkable and stain free.

7. A leader inspires his team to achieve target and lead them to success. He/she brings best out of them in the time of crisis also.

8. A good leader is the one who can give people voice and direction.

9. A leader should be tolerant of uncertainty and should always remain tranquil, composed and persistent to his/her goals.

10. A good leader always keeps a cool head in times of crises and finds solutions to get everybody out of any difficult situation.

Some qualities discussed above are naturally present in individuals, right from the time of birth and some others are developed with experiences. The characteristics discussed can be strengthened and developed to become a good leader.

Q2

 Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. Kurt Lewin (1939) led a group of researchers to identify different styles of leadership. This early study has been very influential and established three major leadership styles. The three major styles of leadership are (U.S. Army Handbook, 1973):

o Authoritarian or autocratic

o Participative or democratic

o Delegative or Free Reign

Although good leaders use all three styles, with one of them normally dominant, bad leaders tend to stick with one style.

A u t h o r i t a r i a n ( a u t o c r a t i c )

I want both of you to. . .

This style is used when leaders tell their employees what they want done and how they want it accomplished, without getting the advice of their followers. Some of the appropriate conditions to use it is when you have all the information to solve the problem, you are short on time, and your employees are well motivated.

Some people tend to think of this style as a vehicle for yelling, using demeaning language, and leading by threats and abusing their power. This is not the authoritarian style, rather it is an abusive, unprofessional style called “bossing people around.” It has no place in a leader's repertoire.

The authoritarian style should normally only be used on rare occasions. If you have the time and want to gain more commitment and motivation from your employees, then you should use the participative style.

P a r t i c i p a t i v e ( d e m o c r a t i c )

Let's work together to solve this. . .

This style involves the leader including one or more employees in the decision making process (determining what to do and how to do it). However, the leader maintains the final decision making authority. Using this style is not a sign of weakness, rather it is a sign of strength that your employees will respect.

This is normally used when you have part of the information, and your employees have other parts. Note that a leader is not expected to know everything — this is why you employ knowledgeable and skillful employees. Using this style is of mutual benefit — it allows them to become part of the team and allows you to make better decisions.

D e l e g a t i v e ( f r e e r e i g n )

You two take care of the problem while I go. . .

In this style, the leader allows the employees to make the decisions. However, the leader is still responsible for the decisions that are made. This is used when employees are able to analyze the situation and determine what needs to be done and how to do it. You cannot do everything! You must set priorities and delegate certain tasks.

This is not a style to use so that you can blame others when things go wrong, rather this is a style to be used when you fully trust and confidence in the people below you. Do not be afraid to use it, however, use it wisely!

NOTE: This is also known as laissez faire (or lais·ser faire), which is the noninterference in the affairs of others. [French : laissez, second person pl. imperative of laisser, to let, allow + faire, to do.]

F o r c e s

A good leader uses all three styles, depending on what forces are involved between the followers, the leader, and the situation. Some examples include:

o Using an authoritarian style on a new employee who is just learning the job. The leader is competent

and a good coach. The employee is motivated to learn a new skill. The situation is a new

environment for the employee.o Using a participative style with a team of workers who know their job. The leader knows the problem,

but does not have all the information. The employees know their jobs and want to become part of the

team.o Using a delegative style with a worker who knows more about the job than you. You cannot do

everything and the employee needs to take ownership of her job! In addition, this allows you to be at

other places, doing other things.o Using all three: Telling your employees that a procedure is not working correctly and a new one must

be established (authoritarian). Asking for their ideas and input on creating a new procedure

(participative). Delegating tasks in order to implement the new procedure (delegative).

Forces that influence the style to be used included:

o How much time is available.

o Are relationships based on respect and trust or on disrespect?

o Who has the information — you, your employees, or both?

o How well your employees are trained and how well you know the task.

o Internal conflicts.

o Stress levels.

o Type of task. Is it structured, unstructured, complicated, or simple?

o Laws or established procedures such as OSHA or training plans.

Pos i t ive and Negat ive Approaches

There is a difference in ways leaders approach their employee. Positive leaders use rewards, such as education, independence, etc. to motivate employees. While negative employers emphasize penalties. While the negative approach has a place in a leader's repertoire of tools, it must be used carefully due to its high cost on the human spirit.

Negative leaders act domineering and superior with people. They believe the only way to get things done is through penalties, such as loss of job, days off without pay, reprimanding employees in front of others, etc. They believe their authority is increased by frightening everyone into higher levels of productivity. Yet what always happens when this approach is used wrongly is that morale falls; which of course leads to lower productivity.

Also note that most leaders do not strictly use one or another, but are somewhere on a continuum ranging from extremely positive to extremely negative. People who continuously work out of the negative are bosses while those who primarily work out of the positive are considered real leaders.

Keeping the above in mind, it seems that some picture paternalistic behavior as almost a barbaric way of getting things accomplished. Yet, leadership is all about getting things done for the organization. And in some situations, a paternalistic style of decision-making might be required; indeed, in some cultures and individuals, it may also be expected by not only those in charge, but also the followers. That is what makes leadership styles quite interesting — they basically run along the same continuum as Hofstede's PDI, ranging from paternalistic to consultative styles of decision making. This allows a wide range of individual behaviors to be dealt with, ranging from beginners to peak performers. In addition, it accounts for the fact that not everyone is the same.

However, when paternalistic or autocratic styles are relied upon too much and the employees are ready and/or willing to react to a more consultative type of leadership style, then it normally becomes quite damaging to the performance of the organization.