WE ALL dream. It is an inherent part of human being and I believe it is good. To dream makes you strive,. work harder, have ambitions and goals. I recently had the pleasure of listening to a speech given by Sir Ranulph Fiennes, arguably the world’s greatest living explorer. Sir Ranulph’s achievements include the first circumnavigation of the world’s polar axis and running seven marathons in seven days, on seven different continents.. Listening to him speak was truly inspirational.
It made me realize that anything is
possible if you put your mind to it, truly believe an are 100% committed
to fulfilling your objectives. Having said this, dreams should always be
realistic. I am often asked if when I left
I always remember a piece of advice I was given in those
early days. To dream and reach for the sky is good, but at the same time
it is equally important to keep your feet firmly on the ground. I have
always tried to remain true to this and I would offer
the same advice to anyone looking to build a successful global business.
Global expansion should not be about conquering, but about what
makes sound business sense. This is the fundamental question that every
business must ask itself when considering its future growth opportunities.
Why do you need to expand? Is it because it will helps the consolidation
of your industry? Or help you to capture international market share? Or
create a global brand? Is it necessary in your market segment? Is it about
technology? Is it because the financial community is putting pressure on
you to find new ways to maintain growth? Or is it only because growth is
fashionable?
Towards the end of the 1980s my business in
The primary input material that we
used at the plant in
Our move into
In the case of the steel industry, consolidation
was, and still is, vital for its survival. Right from the early days, I
always believed that a global business model would bring substantial business benefits for a steel company. Our growth and
strategy was shaped accordingly. We have been proved right, but when I
started to follow the path of consolidation it was in fact extremely
unfashionable. My peers believed that the steel industry would always
remain regional. This is where confidence plays a very large role.
If you are convinced of the soundness of your business strategy, follow it even if it goes against that is traditionally acceptable. Despite facing many hurdles over the years, I am extremely proud that Mittal Steel has led the way in steel industry consolidation and played a central part in shaping the future of steel. Our focus has always been on being a low cost, high margin producer with a key part of strategy focusing on the benefits of being vertically integrated. We have achieved a great deal but it is not by any means over yet as there is till a lot to do before we can emerge as a truly sustainable industry.
What are the opportunities for Indian business? The economy
has doubled in real terms since reform began in 1991. Consumer demand is
increasing even faster. Stocks are performing well and we are seeing
considerable foreign investment into
There is no doubt that Indian business today has some very
strong foundations. Firstly, it has the benefit of a fast-growing economy
with a democratic process. Secondly, its multicultural and multi-ethical
society means it is already used to operating within different cultures
and regions. We Indian people have a great intellectual capacity, coupled
with a natural ambition and entrepreneurial spirit and a drive and
character to work hard. When we acquired our facilities in
The plant was really struggling,
production was a fraction of what it was capable of, wages weren’t being
paid and there was no power or water supplies to the town. Other steel
companies, including major
Conditions in
We also have a number of notable global success stories
already that demonstrate to us that Indian business can
be highly successful on a global stage. To date these are mostly, but not
strictly, in the software and IT industry. The Indian telecoms industry is
another good examples so is airline industry, petrochemical industry.
These sector are prime example that how the entrepreneurship can change
the entire model and how this business model can be taken globally.
As well as becoming more global in their outlook, it is
vitally important for Indian businesses to take full advantage of all
opportunities that exist within their home markets. Yes, they must look
for global opportunities, but not to the extent that they ignore Indian
demand - first exploit `inward’ opportunities before looking
outwards’.
Yet despite
these strong foundations and good examples, more broadly speaking we are
not yet playing a major role in global business. Why is
this and what do we need to achieve it? There are a number of key
components which will be vital to its achieving greater success on a
global scale. These include better corporate governance, more clearly
defined leadership and direction, the right mind-set for expansion, a more
open culture and economy, a responsibility to society and the community,
partnership relationship with the unions, better integration with overseas
countries, technology and innovation and the flexibility to take advantage
of opportunities when they arise.
It is no small list. But being successful globally is not
easy. It is about continued hard work and commitment. All of these
components I found key to our own successful global expansion. Take for
examples corporate governance. Mittal Steel operates in 16 different
countries with listings on the NYSE and Euronext. This means we have to
have very high standards of corporate governance. The cornerstone of our
philosophy is that we have to use the most stringent practices at all our
subsidiaries.
It is fairly easy to identify what is needed. The hard challenge is
in addressing these issues and encouraging corporations to adopt the right
mind-set and make the necessary changes. This change has to start at the
top down. The CEOs of Indian companies are going to need to look at their
own role in the organisation. Most likely if they want to expand globally
the structure of the organisation will need to change.
Truly professional organisations will have to be created with clearly defined responsibilities and delegation. It is often difficult for CEOs to let go and place trust in others, particularly in the growth phase When I started my business I was deeply involved in every aspect of our operation. As we have expanded it is no longer possible for this to be the case.
My role as CEO of a US$30 billion company is nothing like it was as CEO of a small rolling mill in
It is also important to create a strong, but flexible, vision
for your c o m p a n y. This is a very i m p o r t a n t point and one
which I would like to expand on. It is important to recognise that
large-scale, b u s i n e s s - changing opportunities
don’t come along every day. Managers can and should take steps to
encourage a major opportunity, but timing and preparation is equally
important.
Opportunities will come along but you can only take
advantage of them if your business is already in a strong shape and you
are well prepared. Preparation and continued focus in the quieter times is
equally as important as the big deals. People often forget that I spent 13
years building up our business in
Our key ability to take advantage of this opportunity was our strict cost-focus and management expertise. A philosophy that we have maintained over the past fifteen years as we have continued to grow. Mittal Steel today is still one of the lowest-cost producers in the world with a strong balance sheet. We have this position not because we are simply low-cost, but because we work very, very hard at being low-cost.
Thus when the golden opportunity presents itself if you should be
prepared. It is important to recognise also that opportunities when they
come will not necessarily be how you expected them. As such it is
important to have a strong, but flexible vision. Our vision is to be the
world’s most admired steel industry.
This vision has remained constant over the years, but is still gives us the room to be flexible when opportunities arise. We have never for example said that we must only be in developing countries or only in developed countries. I would not have anticipated in 1994 that a year later we would buy an integrated steel plant in
It is Mittal
Steel’s ability to be flexible that has enabled us to demonstrate
leadership on a global basis which has led to our swift emergence as the
world’s largest and most global producer. The privatisations in Central
and
Maintaining a
global employee base is also crucial when looking to expand globally.
Indian businesses should start thinking about what talent they can bring
in from outside
Leadership starts right at the top and it is the
responsibility of management to set the right tone. But political support
for the development of Indian business is also key and I do believe that
our government can improve in this aspect.
I am very proud to be an Indian and genuinely excited about the
prospects for the Indian economy and Indian business. Indians have some
outstanding personal attributes that give us a significant advantage over
other nations. I truly believe that no other country can compete with
We have strong foundations and a lot of potential opportunity. But there are many aspects where further improvement and focus is required. Fundamentally it is important to understand the rationale for being global. Does it really fit with the profile of your industry and your longterm strategy?
If the answer is yes, then have the
confidence required and demonstrate the leadership necessary to chase your
dreams. Stay true to your convictions and set clear operating, financial
and marketing strategies that will be crucial to creating alignment in
your organisation. If this can be done then yes, I believe that India Inc
can “conquer” the world, just like what we have done in the steel industry
or
Source : Famous Blogspot