Investors and analysts are a relieved bunch after Mahindra Group executive chairman Anand Mahindra revealed on Tuesday his choice of successor was known to the governing board. India Inc has seen several family battles over assets and the value-destroying consequences for stakeholders. One of the epic examples of a family tussle was the spat between the Ambani brothers. Even the Tata Group was, not so long ago, embroiled in a nasty public display of acrimony between Ratan Tata and Cyrus Mistry. Mahindra, while responding to questions on a news channel, assured stakeholders of a strong leadership bench in the group that could step up to take on new roles as and when required. Whoever succeeds Mahindra, though, will have a huge task on his hands. The company today boasts a consolidated revenue of over Rs 80,000 crore and a profit of nearly Rs 3,700 crore, after adjusting for minority interests (See: Mahindra Group Snapshot). Looked at in aggregate, the market capitalisation of the listed companies adds up to about Rs 1,75,000 crore. That’s a big business empire to lead.
Mahindra, though, dismisses such apprehensions. He argues that there is no such thing as a TINA (There is no alternative) factor. “There is always an alternative. The biggest mistake any leader can make is that he or she is indispensable,” he adds. “The board already knows my choice of leader to replace me,” he states. The Mahindra Group has an executive board comprising 22 members, including Mahindra, that guides the strategy for the group. It comprises group leaders and leaders drawn from its eight business verticals — spanning mobility, farm equipment, IT services, financial services, urban lifestyle, clean energy, business-to-business products and defence. The Mahindra Group has a tradition of identifying and promoting potential leaders through the ranks. Anand Mahindra too started his journey as an executive assistant to the finance director of Mahindra Ugine Steel, a group company, in 1981. He earned his lapels and was promoted steadily over the years. He was appointed president & deputy managing director of Mahindra & Mahindra in 1989; in 1997 he stepped up to the position of managing director; in 2001 he assumed charge as vice-chairman; in 2012 he took over as chairman; in 2016 he relinquished the managing director’s position and was re-designated executive chairman.
Early in his career at Mahindra & Mahindra, he charted the diversification journey of the group, starting with forays into real estate and hospitality. This trend continued and during the past 20 years of his journey at the helm, Mahindra & Mahindra’s market capitalisation has grown at a compound annual growth rate of over 18% from a shade over Rs 3,000 crore in 1997 to over Rs 87,000 crore today. The way Mahindra has grown through his career, so have many in his leadership team. Pawan Goenka, his trusted lieutenant, joined the company as general manager of R&D in 1993 and today is managing director of Mahindra & Mahindra. Similar tales can be traced for other old-timers like group president Rajeev Dubey, and younger leaders like Rajesh Jejurikar, president of farm equipment. Clearly, Mahindra has a team of time-tested professionals he can bank on in case of a contingency. He also has hand-picked industry stalwarts like CP Gurnani, CEO of Tech Mahindra, and Anish Shah, group president (strategy), who can be roped in at a time of crisis. And that is reassuring to investors.
And while Mahindra is treading down the path of good governance by putting a clear succession plan in place, there is no reason to expect he will hang up his boots anytime soon. After all, he is still fit, agile and brimming with energy. His uncle Keshub Mahindra stepped down only at the prime age of 89 years. Going by this, Anand Mahindra at a young 62 years still has another 27 long years to go.