There are two kinds of entrepreneurs: fundamental entrepreneurs who like to build and save for the long term, and speculative entrepreneurs who prefer to make a quick buck by investing in hot stock. Whether it is the world?s largest grassroots petroleum refinery at Jamnagar or the thought of re-thinking retail in India or uniting Business and Sports, Mukesh Dhirubhai Ambani (MDA) thinks and delivers business on an unusually large scale. MDA?s business philosophy comes from the old school which says that money cannot create money. Instead, firms will have to make money by supplying goods and services that meet consumer needs. The company I admire for its ?think beyond? vision is Reliance Industries backed by Mukesh Dhirubhai Ambani Group.
A strong case for Reliance Industries has been that they have clearly leveraged their business strengths in industries where the steam had already been outraged by other players. But determinedly so for Reliance industries they have made a big business case in a pre-leveraged industry where they orchestrate capability to lower costs or continually create better products and services delivered at phenomenal value for the end user.
After identifying an opportunity, Reliance has been known to turbo charge growth in the chosen sector. Speed, cost, and quality have become the engines of business process for Reliance to achieve excellence in all their business enterprises. It also has to do with the fact MDA has always stuck to the fundamentals of its core business.
Another strength that Reliance industry plays from is that they do not leave room for strategy to go wrong. The organisation is known for its practice of not keeping power to themselves, but empowering others. More than a manufacturing or retail company, it is an idea company which acknowledges that business concepts can be best carried out by professionals and accordingly invests heavily in talent acquisition. It therefore gets top quality people to execute its projects. The top brass takes time to ensure that blueprints are within the framework of factors they can predict, influence or control and there is no gap between what is written in the books and the company?s vision. Subsequently execution is ensured to be bang on with what has been pre-defined.
As the Founder-president of Franchise India, I have had the opportunity to evaluate a few of their business models in petroleum and retail. For an organisation locked into a long planning horizon and an equally long budget cycle, Reliance has demonstrated the capability to adapt with changing times. Initial Planning has been fine tuned with the purpose to find new ideas to improve business performance. Particularly with Reliance Retail ,in its early phase the company gathered that Retail loyalty realisation has different dynamics and changed its philosophy to focus on what they do best, and partner for the rest and therefore went on to sign agreements with Marks and Spencer?s, Hamleys etc.
Raising money through public issues that brings access to low-cost funds in comparison to high interest rates elsewhere is another competence of the group ,a legacy that the group has followed from 1977 since it went public. The group has never succumbed to personal wealth creation but has year after year reinforced an association by ensuring rich dividends for its over 5 mn shareholders which bring investors to back the new projects rolled out by the company like for instance Reliance Industries recently doled out a 1:1 bonus issue for shareholders just ahead of Diwali festivities.
Reliance Group?s focus to grow combined with MDA?s wisdom of building the organisation around core values have got the group investing in one industry from the next using their cash flows to invest in the businesses of the future that have a clear demand-supply proposition giving a much higher probability event for achieving sustained, profitable growth than experimental initiatives around which there is little consensus. Thereafter the group works on integration of operations that will bring higher productivity through consolidation of backward and forward linkages to achieve greater scale and to maximise the consumer wallet share.