Sunil Mittal, chairman and CEO of Bharti Group, speaks about the deal with MTN, the challenges of a cross-border merger and life after Bharti
Sunil Mittal doesn’t show it. But there’s a very good chance that deep inside, he is feeling heady and excited again, after a long time.
Q & A
You have brought new leaders from the outside. Does the culture at your organisation accept outsiders?
Don’t think of this as management jargon. When we started out, we were an entrepreneur-led, entrepreneur-promoted company. We did a great job. In some companies, this phase lasts forever. Nothing wrong. But in my view, if you do that, you remain small. You can’t manage a large company using this model. So we moved to the next stage — entrepreneur-led and professional-supported. Over the last four years, we’ve moved to professional-managed and entrepreneur-supported. And that’s where we want to keep it.
There is one more stage — professional-led and professional-supported. Vodafone is in this mould. To a certain extent, so is MTN. No single shareholder is dominant. Ownership was created among managers unlike Vodafone. I personally believe, the finest way to drive value for all stakeholders is from the position we are currently in.
Parts of our organisation were moving to the professional-led and professional-supported model. I had to pull it back because I figured they were becoming too bureaucratic. Things didn’t move; too many approvals were needed; too many emails. That is something we want to avoid.
In which case, how do you retain professionals?
We have retained them. People who come in from the outside love what they see here. We ask them to tell us what’s good, what’s bad and what’s ugly about us. They tell it like it is. In turn we tell them, here’s the canvas, go fix it.
You have a point there. The real issue is always with the war veterans. How do you handle that?
Four years ago at a conclave, I let go. I told the veterans you’ve done a fantastic job of building the company. But unfortunately, some of you haven’t kept pace. And I don’t want you to come in the way. You’ve got the titles, you’ve got the money, but no major responsibilities. So, I said, walk out now, with your medals and feathers intact. Else, you will start dying. People were shocked. That evening people came to me and said they had never heard me talk as sharply. And I had to explain to them where I am taking the company from here. I think most of them are now gone.
You said you are a professional-managed entrepreneur-supported company. But implicit to that is your being around, somewhere in the background. Do you think it possible that someday Airtel could become a professional-managed professional-led company?
“Me” implies some shareholder. You must remember that Singtel owns 30 percent in this company. Airtel should never become a professional-managed professional-led company. This company’s foundations are different. If you strap a different edifice to this foundation, it will not work.
You also said things didn’t go well when some parts of the company went the professional-managed professional-led way. What specifically were the issues?
Speed was compromised.
What was holding the organisation down when you wanted it to move?
Bureaucracy and a lack of urgency.
Why was it missing?
You must feel like the deer in a forest, which is always afraid of being attacked. Else you’re dead.
How do you institutionalise that?
Entrepreneurs do it intuitively. For professionals, it is part process and part intuition. When we wanted to outsource our network, it was considered blasphemy. Akhil [Gupta] and I spoke about it many times. I know how many obstacles he had to face to take it through. Everybody was dismissive of the idea. Sometimes, seniors will not only say this isn’t good, they will work hard to ensure it isn’t good. I had to protect him. That’s where the professional-managed entrepreneur-supported model comes into play. I said let’s go.
What happens beyond MTN?
In telecom, I am constantly scanning my horizons. I meet so many people and, spend time with them. I just spent a day with Arun Sarin [former CEO of Vodafone]. But nothing specific on my mind really!
Did the thought ever cross your mind of getting a professional CEO like Arun Sarin into Bharti?
He is a great professional. But he has the same problem I have. He has led one of the largest companies in the world. Where does he go from here? He has to find his next fix.
What about Asim Ghosh (former CEO of Vodafone India)?
You must remember, despite his best efforts Asim, could not upstage our team. But if there is one professional outside the Bharti stable in India I have huge respect for, it is Asim. He straddled three roles — mine, Akhil’s and Manoj’s. But I always used to tell him you are not going to get past us.
And beyond business, what’s on your mind?
Business is the only canvas available to me. I am not a trained scientist or a lawyer.
What about politics?
Politics is one way of nation building. Sitting in this room five years ago, I would have said yes, I’ll consider that seriously. But by and by, that has gone away. It’s not on the table anymore.
Participation is another form of nation building. That’s why we have the Bharti Foundation. One lakh children will be studying in these schools. To my mind, this is the biggest intervention programme by any corporate in independent India. We are building a school for public policy in Mohali, on the lines of the Kennedy School. I don’t see myself as a businessman alone.
Look at the Wal-Mart family. They have a 40 percent stake in the company. But only one Walton is the chairman. There’s nobody else in business. Somebody is a teacher, somebody else is a scientist, an investment banker. These models work. I am trying to break that standard mould that family businesses must be run in a certain way. We are privileged to be successful. But are we a family business? I have always said no. We are a family in business. And that distinction makes a huge difference.
Nandan Nilekani crossed over. Does that catalyse something in your mind?
Nandan freed himself from his executive responsibilities over time. I haven’t cleared my table as yet to take any responsibilities like those. But who knows. That’s not politics.
Doing a Nandan sometime?
I don’t know in what form and shape. Maybe at the Bharti Foundation, maybe a trustee at the Carnegie Endowment. They’re doing phenomenal work on climate change, disarmament, non-proliferation. That interests me.
When do you expect to clear your desk?
Hopefully the job will keep changing. I am not doing what I was doing five years ago. I’m not even doing what I was doing three years ago. Manoj is now the MD of the company and he is on the board. I think in a few years time I will be just the chairman of the group. All these new people who are coming in the system will allow me to do that.
How do you transfer the intuition you have developed?
It’s like my kids coming to me with questions on math. I could give them the answers. And they’d ask me how did you do it? I’d say I can’t tell you that, but I know the answers. They’d laugh and go away. Now, they’ve learnt their formulas and my kids know how to get there.
So from my point of view, processes take care of a large part of intuition. I hope eventually, they will develop it for themselves. They will combine it – more process, less intuition. I had more intuition and less process. In large part it’s already happened. Last year, I was president of CII and travelled too often. But Airtel gained market share. They did a good job.
It was Worth the Wait
MITTAL VS AMBANI
Indian business is dominated by two categories of players: Established families and upstarts. ON one side there are the Tatas and the Birlas who have been around for generations. The Ambanis in their second generation are on the family side of the spectrum since they manage their businesses in a traditional way. Then you have the Sunil Mittals and the Tulsi Tantis who represent the new crop with a distinctly different style of functioning. We spoke to a few ex-Bharti and ex-Reliance executives and here are some of the most marked differences.
Scale vs Brick by Brick
Mukesh Ambani is about scale, grand vision and world class. Sunil Mittal is about speed, first off the block and then builds brick-by-brick. So while Reliance Communications waited to have its networks in 600 plus towns before rolling out the services, Sunil preferred rolling out one by one, Delhi being the first.
Autocracy vs Empowerment
In a very relative sense, at Reliance Industries, every major decision is take by Mukesh Ambani. Bharti is lot more consensus-driven. While for most major strategic decisions Sunil has the last say, executives feel lot more empowered. Executives say there are a lot more opportunities for them to make themselves heard at Bharti.
Family vs Outsiders
Coteries are everywhere, especially so in promoter-led companies. But the difference is that Reliance has two distinct kinds of coteries – extended family and the professionals. At Bharti, MIttal has completely kept away the family. It isn’t unusual for trusted senior executives at Reliance to be invited for dinner at Sea Wind (the Ambani residence). At Bharti, it is rare if ever.
Going Solo vs Joint Ventures
Ambani doesn’t believe in partnerships or joint ventures. Reliance will aim for a global scale on its own. Of course it makes mistake but the blame stops with them. Reliance Retail is a great example. Mittal believes in partnering and fostering partnerships at every level. In retail Bharti brought in Wal-Mart. Even in Airtel, he has IBM, Alcatel and Nokia.
Media
At Reliance, there is a separate group that handles media. Its executives talk – but almost always off –the-record. There are very few people authorized to speak to the media on record beyond Ambani. Relatively, Sunil is lot more sophisticated and liberal in handling media. Professional executives are also accessible.
(This story appears in the 31 July, 2009 issue of Forbes India. To visit our Archives, click here.)