Having a charismatic, all-powerful leader helped Larsen & Toubro make the most out of India’s economic boom in the last decade. It also created a management void
Finally, the time is up.” When he speaks, the air of resignation is palpable in A.M. Naik’s voice. For a man who has always believed in competing hard — and winning every battle — this is an unusual admission.
Realising the Indian Dream
General Electric, one of the most admired corporations in the world, grew on the back of the American dream. It was the same story in Europe as a period of rapid industrialisation turned Siemens into a giant behemoth. By all indications, today, L&T has a similar tryst with destiny. And it needs a new person with guts of steel — and foresight to lead the charge.
Back to Basics
Throughout the Nineties, L&T entered into 50-odd JVs ranging from tractors to heavy commercial vehicles, from industrial valves to shipbuilding. Naik is now prodding his managers to get rid of fringe businesses so that it frees up leadership bandwidth. He says his executive directors haven’t been quick enough to shutter non-core businesses. “I’ve told my colleagues that if they don’t act, I will do it myself. And I’ve demonstrated it several times,” says Naik.
Their demand presented another opportunity for Naik, whose term was coming to an end by April 2004. In December 2003, Naik got his dream job, even as the Birla deal was being sewn up. He was made the executive chairman, the first one to occupy the seat after N.M. Desai vacated the seat in 1989. The board also granted him a five year extension, to allow him to remain in his post until April 2009.
There are whispers within the company that Naik is grooming Uppal for the big job, though both have denied the rumours in the past. According to the head of an L&T group company, Uppal has recently demanded that he be given a board seat by March or else he would look out. When asked, Naik chose to down play the demand. “It is a very normal expectation.”
(This story appears in the 05 March, 2010 issue of Forbes India. To visit our Archives, click here.)