Here’s how Mahindra, the homegrown farm equipment-to-software group, hopes to come together as a more cohesive, formidable unit
Anand Mahindra does not put the acquisition of the South Korean automaker Ssangyong as the next big milestone for his group of companies after the launch of the Scorpio, Mahindra’s top-selling sports utility vehicle built with homegrown technology. Instead, the 55-year-old Vice-chairman and Managing Director of Mahindra & Mahindra confers the title on the new corporate branding that the group is quietly undertaking, under the mantra Rise.
Mahindra Executive Vice-president for corporate strategy and Chief Brand Officer Ruzbeh Irani heads the Office of Strategy Management which is orchestrating the entire rebranding exercise. He says, “We needed to find a core purpose which was relevant to Mahindra tomorrow. From our roots in utility vehicles and tractors, the group has diversified in the last 10 years into multiple businesses spanning finance, infrastructure, hospitality and auto components. We have on-shore presence in China, the EU countries, the US, South Africa and Australia, besides exporting products to many more. We needed a red thread which meant something for our diverse target audiences.”
The Rs 32,000-crore Mahindra group does need the proverbial red thread. Of the 1,13,000 people working for the 11 businesses with 120 subsidiaries at Mahindra, 5,000 are of foreign origin and 8,500 Indian expats. Once Ssangyong is integrated, there will be an additional 4,500 Koreans in its workforce. For most of them the 13-year old corporate credo of ‘Indians being second to none’ could appear specious. “It is also a mountain that we as Indians have already climbed, and as an organisation we have become more global. For our international workforce to come to work only to believe Indians are second to none can’t be motivating,” says Irani.
Scott Goodson, chairman of the US-based StrawberryFrog who partnered Mahindra in evolving ‘Rise’, notes, “Mahindra sought a strategy that starts with a universal cultural insight that would build a community of passionate advocates rather than use traditional brand positioning and advertising.” StrawberryFrog calls itself the world’s Cultural Movement agency, having designed cultural movement strategies for companies such as P&G, PepsiCo, Emirates Airline, Blackberry and IKEA since 1999.
Mahindra & Mahindra Automotive Division CEO Rajesh Jejurikar says, “The first stage of Rise would be to talk about who we are. It is positioning of ‘what is’ rather than an intent. Customers are interested in what we are now, not what we will be three years from now. It is not unconnected to our past.”
Lulu Raghavan, country manager, Landor Associates India, which is helping Mahindra with its brand architecture exercise, says, “It is a strategic purpose at a time when globally corporations are trying to find one that makes sense to their audience. The Tatas had done it in the 90s, Mahindra & Mahindra is doing it now.” Landor’s data shows that perceptions about the company improved drastically after a series of bold moves such as the launch of the Scorpio, the Satyam buyout, entering retail through Mom&Me and the IPO for its hospitality business, Mahindra Holidays & Resorts. Viren Razdan, managing director of brand management firm Interbrand India, agrees, “Mahindra has come to be known as an energetic and a future-oriented brand which is not averse to taking a risk.”
Need to rise
Irani points out that the seeds of Rise were shown during an internal survey in 2008. “We spoke to managers at all the levels to find values that were in our DNA, some of which were new and some which had been there since inception. The core values included integrity while a new one was dynamism. That was the first step in distilling the Rise themes.” Next came an ethnographic research where the company, with the help of StrawberryFrog, fanned out across seven countries (India, US, China, Brazil, South Africa, Egypt and Thailand) for a cross-section of the world audience that it targets to find out if the themes resonated with them.
There is not one but three core purposes in Rise, an exercise geared to be bigger than product launches. Employees of the Mahindra group would ‘accept no limits’ and challenge status quo, engage in ‘alternate thinking’ to solve problems through innovation and ‘drive positive change’ to improve the customer’s life and the community around them. Making these more tangible is the aim to bring in a 10x change in each business. “Each business will be required to create its 10x vision. It need not mean grow 10 times the topline or bottomline, but the scope should be large. It could mean growth in brand recognition or customer satisfaction score. 10x is the metaphor that will make it more concrete for our people to adopt the Rise values,” says Irani.
Jejurikar says, “Ssangyong is a 10x example as it will give us multiple times the scale — in terms of global reach, brand recognition and technology. From an export volume of 1,500 a month, we will look at a 10-fold growth in volume catering to Ssangyong’s markets in Korea and the rest of the world.”
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In the automotive business, a 10x council has been formed specifically for innovation that will bring in scale shifts. “There will be four top-level projects that will radically shift orbits and many operation-level projects,” says Jejurikar. Not willing to discuss the four projects, he says, “At the operational level, for example, the quality of the dealer network will be considered.” The exercise of calculating the optimum number of people a dealer should employ would get replaced with greater efforts in highlighting anecdotes that are in line with the three traits of Rise.
While the automotive division has compiled its dealer stories based on customer feedback (in continuation to an earlier initiative called Delight stories), Mahindra Finance has launched a coffee-table book on such stories featuring employees. One of its subsidiaries, Mahindra Insurance Brokers, has the highest Customer as Promoter (CAP) score, which measures customer satisfaction for the company.
The focus and measure of Rise, however, will be how its employees imbibe the rebranding message. While many of the recent rebranding efforts in recent times are largely marketing led, Mahindra is starting with its employees. Goodson remarks, “People have a natural desire to belong to something bigger than themselves. Once you have a cultural movement, the brand can do anything in a fragmented media environment. Unlike advertising which is about products and talking about yourself, a movement is about passion and others talking about you. At a time when Facebook is exploding in India, which strategy would you want for your brand?”
Expanding scope
Rise will eventually encompass every move of Mahindra — from innovation, work culture, recruitment to its handling of external audience such as dealers and consumers. “Rise is more to get our internal audience aligned. Once they live the brand promise, our external audience will see the difference,” says Irani.
The HR team and the different businesses have worked together to create a calendar for the next three years to do just that. The first year will comprise communication to attune Mahindra employees to the change in attitude.
The next stage will be to revisit leadership competencies and work the Rise credo into performance and reward systems. In this, the first stop would be new employees. From recruitment (till the issue of the offer letter), onboarding (three months from the time an offer letter is given to the time of joining) and induction — every step will see changes in the way the company interacts with a new employee.
To begin with, the Rise credo will reflect in the way an interview is conducted. “There will be much more respect and courtesy from the time we establish contact with a prospective employee. We will be listening more to the interviewee rather than demonstrate how clever we are when interviewing. We will focus on the strengths of the candidate than just try to find out what she or he doesn’t know,” says Dubey. The candidate’s ability to focus on the unmet needs of customers and consider different viewpoints will be the top consideration in recruitments across businesses.
A group of people within the company will facilitate implementation among existing employees. “They are called Risators — people from the middle management in various businesses who have gone through two weeks of people- and customer-centric training. They will be the catalysts in their functions and businesses. They will be the ones to urge everyone to think in 10x terms for their business units,” explains Dubey.
The Risators will ensure that during brainstorming sessions and decision-making, team members are able to express their thoughts and opinions without fear of rejection. “They will help encourage different views rather than assume a control-and-command attitude,” says Dubey. Risators are selected from the middle management instead of top management because “the top 100 managers have been through several such workshops, people at the supervisory level need to imbibe them,” says Dubey.
From the present 30, the change agents could number 1,000 in the next few years. A measurement similar to CAP, called Employee as Promoter (EAP) score that asks employees how strongly they would recommend Mahindra to others on a scale of 1-10, is being put in place. Subtracting the 1-5 scores of ‘don’t recommend’ from the 9-10 scores of ‘strongly recommend’ will tell how good an EAP score the business has. “It will be merged with the key result areas of individuals and departments to understand their affinities with the Rise principles,” adds Dubey.
Thomas Koerner, CEO of Mahindra Forgings Europe, feels the propensity for technical and commercial innovation among all his colleagues across the world will now be on par with those in Germany. “We now have a mentorship programme under which experts from Mahindra’s European operations visit the Chakan (Pune) plant every three to four weeks to transfer knowledge and bring them up to the standards in engineering and logistics that we see here,” says Koerner.
Koerner used to head Jeco, a German forging company that was acquired by Mahindra. Even before merging with Mahindra, Jeco had a knack for expansion and had acquired a competing business, twice its size, which Koerner says is what ‘accepting no limits’ is all about. Little wonder, the official announcement of Rise at the Jeco plants was received well even by blue-collar workers such as forgers. “They said ‘Isn’t that what we are doing here? It’s so close to our vision’,” points out Koerner.
Mahindra is no stranger to innovation either. Jejurikar recalls the Mahindra sales team buying portable DVD players to explain product benefits to prospective Maxximo buyers. “In that category, the customers seldom visit showrooms; they expect pitches at their stands. At the same time, it was difficult differentiating Maxximo from the competition through just leaflets. The DVDs helped stem training costs,” he adds.
The ultra-light commercial truck Gio was developed with just Rs 25 crore born out of modifications of an existing engine and cross-leveraging its three-wheeler manufacturing. Mahindra & Mahindra President (automotive & farm sector) Pawan Goenka, had told Business Standard that his engineers can develop a new automobile platform for Rs 500 crore once the engine and transmission are in place; if not, it can be done for an additional Rs 350 crore. The industry norm: close to Rs 3,000 crore — three times that of Mahindra & Mahindra. The company is working on as many as seven new products, to be rolled out in the next 12-18 months.
Then Mom & Me, Mahindra’s retail venture catering to the needs of mothers-to-be, young mothers, infants and children up to the age of nine, for instance, set up feeding rooms and toilets on the store premises to make it easier for mothers with babies, while one elderly staff in each store acts as the super-parent to bring in credibility to any information sought by new parents who seem open to exchanging ideaswith a peer.
The run-up to Rise has also seen the company stepping on the cross-leveraging pedal. Mahindra Systech has its different business units collaborating to meet orders, while Mahindra has merged with it its research and certain vendors of its automobile and tractor divisions. Top and middle managers have been inducted in various councils across businesses such as marketing, brand and human resources. The creation of such councils will help rationalise costs, according to Jejurikar.
Federal structure
“We are not a conglomerate but a federation, each business headed by an empowered sector president, those of listed entities responsible directly to the boards,” explains Irani. “We resorted to a corporate brand because of the intrinsic perception of the name Mahindra as ruggedly reliable. However, we are doing an extensive brand architecture exercise that will determine how the parent brand is used by the different businesses.”
Most of the communication at a product level will have a common sign-off — ‘Mahindra Rise’. The brand architecture exercise will rationalise the resources to be deployed across the group’s businesses. “For some businesses, the brand will be used as the driver, for some as the endorser and for others it won’t be at the forefront. For example, in Mom & Me, we just say it is a Mahindra Retail venture and there is no other reference to the brand. Such distinctions in company and product names will be fine-tuned,” explains Irani.
Mahindra Retail Managing Director K Venkataraman explains, “Mom & Me was a retail venture, different from what brand Mahindra was known for. For the concept to work, Mom & Me had to create its own emotional recall among the audience. Also, the audience was different from that of most Mahindra businesses — rather than men, it spoke to mostly women.”
Raghavan of Landor says, “At the end of the day, resources will be limited so the brand has to be used without stretching it too thin. Because the relationship of the brand with the business will ultimately create the perception the consumer has of the product.” Industry observers believe sectors such as tractors, automobiles and IT will continue to use the corporate brand as the driver while businesses such as Mahindra Holidays & Resorts may resort to standalone branding. “It was needed to legitimise what was essentially a rogue sector when it had entered but post its IPO the business stands on its feet,” says an industry analyst who refused to be named.
The biggest challenge will be to walk the talk. The Mahindra group, on its part, has set aside Rs 120 crore to be spent over the next three years to fuel Rise through communication and workshops. The social media will be harnessed in a big way to spread the thought. The evaluation of the EAP scores will start from April. Jejurikar says, “We will be asking ourselves every month if we can stretch our resources that bit to take some risk. This will remove the fear of failure and enable the Rise values to be acted out.”