Mahindra Group's Anish Shah: 'We lead with purpose and profits will follow'

I will start with saying that we are a purpose-led company and go back to an advertisement that our founders put in the Times of India in 1945, on the day this was founded. They talked about dignity of labor, about not cost, nor creed, nor color standing in the way of a meritocracy, about opposing antisocial trends. Today it would read like an ESG manifesto, but this was 1945. And that DNA continues in our company. We have always said that we lead with purpose and profits will follow. We operate in about 70% of India's GDP, and we have grown well with the Indian economy and now we are hoping to be able to take the Indian economy to the world.

It was truly an honor for me to be selected as group CEO of the Mahindra Group. A group that I've had tremendous respect for over many years. I came in as head of group strategy, so I had a good sense of where the group was. It was a group that had performance as one of its hallmarks, and for some reason we fell off a cliff. There were a number of decisions that were taken around largely investments in international subsidiaries that came back to create losses, and we lost about 70% of market cap in a period of 18 months post August 2018. It was the first time I would say in the history of the group that we were looking at potential losses for the year. First time as a CFO, not a great place to be to have that kind of a result. And that was all pre-COVID and then the COVID impact. So the first month from a fiscal calendar of April was in a lockdown, so we had close to zero revenue. With regard to the company, cash was the first thing we had to take care of, and that's what we did very quickly. We raised about a billion dollars literally in just a few days. The next set of actions were to really help us get out of some of the challenges we faced. We made the toughest decision literally at the very start, which was two days before I officially got into this role, and that was to exit SsangYong, Korea's fifth largest car maker and a company with $4 billion of revenue. Post that, in the period of the next 12 to 15 months, we exited 15 companies. It's one that I look back and would say is probably the toughest set of actions I've taken because it's not easy to make that call, but it was the right call. These were businesses that were all loss making and therefore it was important for us to exit them. That's what created the momentum from a profitability and a performance standpoint. We pivoted to growth. So if I look back at the start, yes, it was very challenging, but there were a number of things that really helped make it much easier, which is the people that we had, the leaders that we had, the support that we had from our chairman and CEO at that point, Anand Mahindra, and that support really made it a lot easier to go through it.

The key was to prune out things that didn't work very quickly, before they started becoming a drag. And it was important to drive scale and therefore the mindset that we brought in was, let's play big. Let's not play small in any place.

I think the fundamentals stay the same, and that's where I think BCG has done some very nice work in establishing those fundamentals. The challenge is in companies that are not doing very well because how do you address them? Is it something to do with the market, the product, the leadership? What are different levers that can be pulled? And we've taken some of our businesses that were very small and not performing very well and transformed them into something very meaningful. And I'll give an example here of the electric three-wheeler business, and we were making combustion engine based three wheelers. We had a 5% or 6% market share, and we did contemplate should we shut this business down. And as we saw the trend for electric vehicles coming in, we said, let's pivot to electric and let's use the pace that we have from a manufacturing or distribution standpoint. We in fact drove the industry to electric. We got to at one point 60%, 70% market share, which has now settled down to 45%.