Management Perspectives

The fast pace at which we live and work today is driving both incremental and radical change in business and is becoming the new normal. Some organisations are keeping up, but many getting left behind.

It is no longer a question of when or whether it is a good idea to transform organisations in preparation for the future; it is now an urgent question of how to transform. “Why am I doing this?” drove the search for Mahindra’s unifying identity as a global company. The Mahindra Group was founded in 1945 as a steel trading company and shortly became the Willy’s Jeep manufacturer in India.

Growing to scale in India required a unifying identity and purpose that resonated with the values of Mahindra’s Indian customers and employees. As the company’s international operations became more important, a different statement of purpose was needed. Here is the story of Mahindra’s search for its identity and takeaways I believe you will find helpful.

Purpose

In his book Deep Purpose, Harvard Business School Professor Ranjay Gulati examines purpose as a core requirement for success. Gulati looks at the values an organisation’s leaders and employees bring to their job and the values customers associate with the company and its products. The challenge is getting past an often superficial “mission statement” to the fundamental question of, “Why am I doing this?”

Gulati’s thesis is that discovering, articulating, and executing on your company’s purpose is the key to high performance. Anand Mahindra, Chair of the Mahindra Group, was interviewed by Ranjay Gulati for his book and for a podcast introducing the book. Ivey Publishing has a case study about Mahindra’s search for a brand. [PQ: Discovering, articulating, and executing on your company’s purpose is the key to high performance.]

Indians are second to none

India was torn by civil strife and division after its independence. For decades, most farming was at a subsistence level. In the 1990s, about 65 per cent of Mahindra’s revenues came from manufacturing farm equipment and automotive products.

Mahindra made farm equipment, but the systems supporting mechanised farming were limited. Most Indian farmers could not mechanise to increase production and feed the growing population. In 1999, Anand Mahindra was Managing Director of the company his grandfather founded. He described Indian culture as having an “inferiority complex” about feeding themselves, improving themselves, and being a country. Anand and other company leaders looked for a statement of purpose that was relevant to the company and meaningful to its employees.

“Indians are second to none” became the Mahindra purpose statement. An Indian company is saying that it can produce worldclass products and services. Every Mahindra employee heard that they were 2nd to none, and their work at Mahindra brought that vision into reality for the company and for themselves.

By 2011, Mahindra was a major international company with revenues of over US$16 billion with 180,000 employees in 100 countries. It was a major manufacturer of farm machinery and utility vehicles and was also active in aerospace, finance, and insurance. “Indians are 2nd to none” was no longer an appropriate unifying purpose for a diverse international company.

Rise

Working with outside consultants who interviewed customers, employees, and suppliers, Mahindra’s board asked, “Why am I doing this?” The board took time to learn and consider the existing values of the company’s staff. They wanted to find shared values and a purpose for the company that was meaningful to the Mahindra community of leaders, staff, and customers globally.

The board chose “Rise” as the company’s statement of purpose. They believed that the concept of ‘Rise’ expressed the values and aspirations of Mahindra’s stakeholders. “We will challenge conventional thinking and innovatively use all our resources to drive positive change in the lives of stakeholders and communities across the world to enable them to ‘Rise’,” they said. The board approved a ‘Rise’ manifesto with three themes: accept no limitations; alternative thinking; and drive positive change.

Anand Mahindra believes that ‘Rise’—the company’s purpose statement—connects the staff’s work with their understanding of who they are and who they want to be as individuals. An employee is not simply doing a job but “doing a job that impacts people’s lives and helps other people to Rise.” [PQ: An employee is not simply doing a job but “doing a job that impacts people’s lives and helps other people to Rise.]

Creating value from purpose

Mahindra’s board of directors hired consultants and chose ‘Rise’ as a branding statement. If that were all that happened, the board-driven exercise would not change much for the company and its stakeholders. Creating value from the concept of Rise was a separate and difficult challenge. Another consideration was the shared values customers associated with the Mahindra brand—reliability, trustworthiness, warmth, and caring. Inculcating ‘Rise’ values across diverse and autonomous business units would be done while retaining the positive attributes customers attached to the brand.

Using the ‘Rise’ values statement to make Mahindra into a more successful and valuable company would be a complex initiative. Mahindra grew its global presence by acquisitions, joint ventures, and geographic expansion of its core business units. The Mahindra brand was not consistently used by companies in the Mahindra Group. They operated with significant autonomy and their ‘Mahindra identity’ ranged from highly visible to none. The choice of ‘Rise’ as the expression of purpose forced the board to make a second decision, “Who are we? Who are we as a business?” The options included:

1.Drive the Mahindra branding across all businesses within the Mahindra Group, and encourage ‘Rise’ values across all Mahindra companies.

2.Pursue a hybrid branding strategy with a few core businesses operated with strong Mahindra branding while other businesses under the Mahindra umbrella have no brand affiliation with Mahindra.

3.Mahindra Group would operate a collection of ‘brands’. ‘Rise’ would be the values statement for the Mahindra Group, but the operating companies would make their own decisions about branding and values. The Mahindra board chose ‘Rise’ as their purpose statement.

The challenge for the board was what to do next. [PQ: The challenge for the board was what to do next.] The Mahindra board believed that ‘Rise’ could be more than a mission statement. The values of accepting no limitations, alternative thinking, and driving change in the ‘Rise’ manifesto were also a set of cultural values matching the needs of a decentralised organisation and management structure. Introducing Rise encouraged leaders throughout the organisation, over time, to take more ownership of their area of responsibility. Rise reinforced Anand’s goal to delegate more decision-making responsibility. “I don’t want people saying they are carrying out Anand’s orders. That’s not ‘Rise’.

They have to ‘Rise’ first, and they have to believe what they say.” In Prof. Gulati’s podcast, Anand said that he did not try to quantify the results of ‘Rise’. He wanted ‘Rise’ to be the “story” that people tell about the company. He wanted Rise to become the way his leadership team and the staff communicate the company’s value proposition. Mahindra’s profits more than doubled in the seven years following Rise’s introduction. Anand Mahindra believes the autonomy and energy flowing from ‘Rise’ was a significant contributor to the company’s success.

Key takeaways

Mahindra is a large international company with complex business operations. If you are a smaller company or even a regional nonprofit organization, you might believe the steps Mahindra’s board took to find their company’s purpose are not relevant to your organisation. I find the Mahindra story remarkable because it is a large global organisation. Yes, they hired the best outside consultants and had staff and resources to ask, discover, and learn—luxuries less available smaller companies.

Finding the purpose of your company and expressing that purpose in your leadership of the organisation is essential for high performance whether you are captain of your soccer club, running a family business, or board chair of Bank of America. When the Mahindra board asked, “Why am I doing this?” they acted with courage and foresight. A leader of a smaller and less complex company usually has a less daunting challenge when asking that question. The steps Anand Mahindra took to find a purpose for the company and to express that purpose through the company’s operations are guiding principles for leaders of organisations large and small, for-profit and non-profit, and public agencies.

1.Ask, “Who are we? Who are we as an organisation?” Have a realistic understanding of your organisation’s purpose and its value proposition for its “customers.”

2.Ask, “Why am I doing this?” Verbalise your organisation’s core values. Shared values understood by your staff bring purpose to the work they do.

3.Match your competitive strategy and your business model to your purpose — your value proposition and your values.

4.Match your company’s organisational structure, decision-making, and culture to your purpose.

Executive summary

Mahindra grew from an India-based farm equipment manufacturer to a global products and services company drawing strength from a clear concept of its purpose. ‘Rise’— to drive positive change — was the purpose that resonated with its leadership, employees, and customers and became the foundation of Mahindra’s global success!