K Venkataramanan, the new MD & CEO of Larsen & Toubro, says the seeds of transformational growth are already sown
At 6’5” inches, he’s the tallest on Larsen & Toubro’s board, but was ironically nicknamed ‘Shorty’ by his former professor and ‘Tiny’ by the company’s founder. But K Venkata-ramanan, or KV as he is popularly known, is having the last laugh by walking tall — he has managed to climb to almost the highest post in the company.
Professional accomplishments aside, the 67-year-old attributes his success to his energy — “I have more energy than a 40-year-old. I never really had a feeling that I will be retiring.”
Resilience comes handy if you have to rise from the ranks, honing managerial and leadership skills for 46 years in the organisation, in the process overshadowing many more flamboyant and media-savvy colleagues. “We are like the army. A big family,” he says almost philosophically, hoping the change in leadership will not unsettle some of his peers.
Calling him an unflappable survivor is perhaps half the picture. This triple-blue athlete and distinguished IIT Delhi alumnus has been leading pioneering initiatives in L&T— from shipbuilding to power and defence — since he graduated from the shop floors of the engineering giant.
So, if tennis and basketball has taught him to conserve energy and stamina for the long haul, table tennis has helped him excel in quick thinking and reflexes. In all three, he represented Hyderabad and later his engineering college, taking full advantage of his height.
Honed from the ranks
But L&T – his first love, just a wee above his wife and two daughters and probably at par with the grandchildren — has been his home of “Learning and Training” since he joined straight out of college as a Graduate Engineering Trainee. “L&T for most is Larsen and Toubro. For me, its Love & Trust.”
Of course, in this journey of labour and love and to the corner office, there has been the role of destiny and a bit of luck. For that, KV says, “I’ve had Harivansh Rai Bachchan’s – the original Big B — immortal lines, ‘Koshish karne waleh ki kabhi haar nahi hoti’.”
This will come handy when KV braves the most challenging of times as L&T’s new MD & CEO for the next three and a half years. The house that A M Naik has built brick by brick is going through the most volatile of periods in recent times. Aggressive competitors, cheap imports, slow project takeoff and rising interest rates have slowly nibbled at margins and profitability. In fact, for the past one year, the company has a negative order book. It’s hitherto teflon-coated shares have also taken a huge beating. International growth hotspots like Abu Dhabi have been stuttering and the conglomerate — with 18 companies, 77 businesses and 125 subsidiaries, with consolidated revenue of close to Rs 60,000 crore — has become unwieldy and unmanageable.
But having “had a feel of 85 per cent of the total business”, it will be relatively easier for KV “to oversee 90 per cent of the sales”. At least, chairman A M Naik thinks so.
Venkataramanan has his own blueprint ready, too. “We have sown the seeds of transformational growth,” he told Business Standard in an interaction after taking over the top job today. “We now have both capacity and capability of doing high-end engineering and construction work, world over. We have grown laterally, too, in deepwater oil and gas exploration, for example.” The passion comes naturally, as he was overseeing hydrocarbons as its president and representative in the board as a wholetime director till 24 hours before.
Ahead
L&T’s globalisation drive will continue. Beyond the Gulf and SE Asia, now Africa and parts of CIS (former USSR) are the new playgrounds in its emerging markets strategy. It also helps the company to widen its net for new sources of procurement.
Internationalisation would also mean scouting JV opportunities with a clutch of new global peers for big contracts of anything between one to four billion dollars. “For these, 50:50 consortia with three or four like-minded partners from Japan, Korea is a better bet. It will also restrict competition,” he says.
Big projects with high margins are a focus area. So much so, L&T is making a “crack team” that will traverse the 10 independent companies created to decentralise operations, to “front-end and create new structures, seek new JVs and design them”.
Access to geographies, newer technologies and scale will also see L&T finally go shopping for companies and assets world over. But KV is also clear that India is the natural playground. “It will remain that way. Today, international operations contribute 15-16 per cent of sales. We are looking at 25-30 per cent in the next two-three years.”
He has his job cut out. He has to bring down costs by improving operational efficiencies, unleash automation and by increasingly veering towards high-tech. Along with Naik and the board, to take a hard look at the portfolio, to restructure existing JVs and exit non-core small businesses, as the brass gets cracking with a mid-term review of their strategic plan. Equally important will be to woo fresh and young talent and groom them.
It means no work-life balance. “I maintain my own style and not clone anybody. I have known what working 24x7 means from Naik, but I still take time out for sports.”
When she was getting married to him, his wife may have been forewarned that, “He’s a nice guy. But you don’t trouble him about sports and L&T.” But she is still the CEO at home, he says.
