Reinvent for the future like Tom Cruise in Top Gun Maverick says Kumar Mangalam Birla

• We are witnessing a unique explosion of new business building said Kumar Mangalam Birla in his annual reflections note of 2022-23.
  
  
• Compromises that have been made by businesses in the interest of growth, and alarms have been set off too late, he says.
  
  
• Core metrics like operating profits, gross margins, and cash flows — have enduring resonance across business cycles.
  
  
• He cites Top Gun Maverick – the 2022 sequel to the 1986 movie Top Gun – as a good example of combining brand power with excellence to win over GenXers and GenZs alike.
  

There are no shortcuts to business building, says Kumar Mangalam Birla, the chairman of the Aditya Birla group, in his annual reflections note of 2022-23. He also added that we now live in a world of increasing opportunity and accelerating uncertainty.

The 55-year-old head of one of India’s oldest and profitable business groups said that we are witnessing a unique explosion of new business building thanks to availability of capital, coupled with young talent brimming with ideas.

Hustle vs Hubris
“There is much to be celebrated and learnt from the raw energy and hustle of many of these new ventures in the startup ecosystem. At the same time, it’s also increasingly clear that there is a thin line between hustle and hubris,” said Birla.

According to him, businesses — new or old – must get a few things right to strike the right balance. He pointed out issues and also offered suggestions. Right on top are the compromises that have been made by businesses in the interest of growth – where alarms have been set off too late.

“Unfortunately, there have been one too many examples recently of teams that have embraced shortcuts. Build for the long haul and create a culture of values, where actions matter more than slogans,” he said.

The metrics that matter

Incumbents and insurgents both should ‘own the offensive moves’, according to Birla, who manages the metals-to-retail conglomerate.

Big bets need to be orchestrated based on fundamental strengths — better unit economics, massive scale, network advantages and speed. “Play out the patterns on the chess board three moves hence. If you do not continuously reshape the terms of the industry based on these big bets, someone else definitely will be playing to theirs,” he said.

He insists that there is value in core metrics like operating profits, gross margins, and cash flows — terms that have enduring resonance across business cycles.

Wing it like Tom Cruise

However, we are living in a world of shorter business cycles where technology is changing and consumer needs are evolving. “For a group like ours, a unique challenge is to harness the trust and stability that comes from longevity, while ensuring that we can continuously reinvent ourselves,” he said.

In this context, he quotes the example of the recent hit Top Gun Maverick, which grossed $1 billion at the box office in 2022 in the very first month of its release. It’s a sequel to the 1986 original that catapulted its lead actor Tom Cruise to stardom. But those who watched this movie are not just nostalgic GenXers but also GenZs, who enthusiastically embraced the movie.

“This is in no small part due to the push for cinematic excellence, the commitment of a star who still does his own flying, and the imagination to reinvent and build for the future,” says Birla telling the tale of how old and the new can come together.

How’s the future?

A large number of business leaders have been struggling with new and evolving business needs. In a survey conducted by PwC, 41% Indian CEOs said that they do not expect their companies to be economically viable in ten years if they continue on their current path. They also see multiple challenges to profitability within their industries, as they believe they would be operating in a much different scenario than they are used to.

Around 62% of India CEOs believe that changing customer demand will impact profitability in their respective industries over the next ten years to a large or very large extent. Birla too says that businesses are facing tough conundrums like harnessing brand power, distribution might with tech, forward looking product pipeline, consumer relevance and an agile workforce.

“What are the bets that see through the short-term fads and translate into sustainable advantage? I do not have the answers to all these questions but take heart in some of the unique experiments that we have underway to find solutions,” says Birla.

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