Rajiv Bajaj: Inside the mind of India Inc's most unconventional CEO
The mood was grim in the second floor meeting room of Bajaj Auto office at Akurdi, near Pune. It was early 2008, and Rajiv Bajaj and his A-team, consisting of Pradeep Shrivastava, Joseph Ibrahim, Ravi Kumar, Kevin D'Sa, among others, were huddled around the centre table listening intently to an internal presentation.
The theme: how to compete with Hero Honda. The prognosis looked weak. The question before the motorcycle major was: what parameters could Bajaj Auto beat its formidable Japanese competitor on -- technology, quality, economies of scale, distribution? The answers were disheartening, to say the least. The Hero Honda JV seemed to be ahead on every count.
Clearly, Bajaj Auto needed some answers, and quickly. "That day we were actually discussing the end of Bajaj," says managing director Rajiv Bajaj. "Sometimes it happens that you are almost at the summit. It is within reach and everybody thinks it will happen. And then the tide turns and you can't do anything right. So you really have to sit and introspect. We were in big trouble."
The company had worked hard on developing a new product portfolio, created a robust R&D setup from scratch, re-configured its supply chain, and reenergised its legacy distribution network. All that had come to naught. By the end of the meeting one possible approach offered hope. It was one that European auto brands had used successfully against the Japanese onslaught -- a brand-led growth strategy. It was a big bet for the Rajiv, who had taken over the reins of the company from father Rahul Bajaj just three years back.
So did it work? The numbers sure tell the story. Four years ago, Bajaj Auto had sold 2.45 million vehicles to clock Rs 10,728 crore in topline and Rs 748.9 crore in profits. This year, it closed with sales of 4.34 million vehicles, a topline of Rs 20,139 crores (nearly a third from exports), Rs 3,004 crore in after-tax profits, and margins at an industry-leading 20.2%. The sweetest victory of all: the Bajaj Discover toppled Hero's Splendor to become the world's largest selling motorcycle brand this September.
BEHIND THE NUMBERS
And how did Bajaj put his unconventional gameplan to action? Bajaj was running out of choices, disillusioned as he was with management science. He set about searching for answers in what's now his signature style — seeking inspiration from other sciences like Homeopathy and Yoga, success stories like those of Toyota and Volkswagen and even McDonalds, and applying it to his industry.
Best practices are known to be extremely risky and tough to execute. Replicating other companies' processes carries the danger of unintended consequences that could create havoc with business models. Such a bold bet needed a leader with a risky appetite, courage of conviction to carry it through and also a very deep working knowledge of all parts of the company, all qualities that young chief executive possessed. For some Rajiv would have been still wet behind the ears with just 3 years corner room experience.
http://economictimes.indiatimes.com/features/corporate-dossier/rajiv-bajaj-inside-the-mind-of-india-incs-most-unconventional-ceo/articleshow/16869258.cms
No comments:
Post a Comment