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Business

The real Mukesh Ambani

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The New York Times has a 6-page profile on India’s richest man, Mukesh Ambani. [NYT] (tip Spee via email)

Mukesh Ambani
img: via NYT

I’m not a lifelong Ambani fan or anything, neither do I get paid by the Ambanis to run articles on them (I wish I was, but that is a different story). The reason I found this article intriguing was because Mukesh Ambani received a lot of flak for wanting to build his $2 billion home, the costliest in the world [UD]. To me, this article explains what drives Mukesh Ambani, the human being, who also happens to be one of the richest men in the world.

Speaking of the $2 billion home, estimates for the home have been revised to $50 million.

Although the price tag for the residence has drawn estimates as high as $2 billion, a Reliance spokesman said it would ultimately cost $50 million to $70 million

Did Forbes screw up in the rupee-dollar conversion? ($50 million = Rs. 2 billion at Rs. 40 a dollar)

In the article, Ambani is described as a thoroughbred patriot and bleeding heart, as evidenced by the name of the team he owns “Mumbai Indians”.

On one hand, he is seen as a man whose heart bleeds for India. He is motivated by “the ability to change the face of the country,” said K. V. Kamath, the C.E.O. of ICICI Bank and a longtime financier and friend of the Ambanis. “That is the biggest kick anybody would get today — that they could touch the lives of a large number of these billion people and make things better for them.”

That is as long as his compatriots don’t stand in the way of his business expansions.

On the other hand, Mr. Ambani is also known as someone who lets little stand in his or Reliance’s way.

“Remember: these guys all grew up in the License Raj,” said a close friend of the tycoon, referring to India’s decades-long experiment with rigid state control over the economy. “They grew up as lotuses from the filth. It makes them tough, it makes them suspicious, it makes them vindictive at times, and it makes them come out in a hurry. They always see life as, ‘Oh God, better not miss an opportunity.’ ”

“When they were growing up,” added the friend, who requested anonymity for fear of upsetting Mr. Ambani, “you didn’t get a second chance.”

I got a kick out of the “license raj” comment. To me, this single sentence explains why Indian businessmen these days are so successful at everything they seem to touch. Having been brought up in an atmosphere where you not only had to fight competitors but also the government, probably imbibed in them a certain combination of business savvy, ruthlessness and opportunism, that stands them in good stead in a global business market.

The article goes on to compare his down-to-earth taste compared with peers Tata, Godrej and Mallya, something that could be perceived in some quarters as “lacking in class”.

Mr. Ambani comports himself quite differently. Among family members, he prefers speaking Gujarati to English, friends say. He may ask colleagues to stop at the temple with him during business trips to partake in a ritual Hindu prayer. He loathes Western suits, preferring a white short-sleeved shirt, black trousers and black shoes that resemble sneakers cross-bred with office wingtips.

His idea of entertainment is not ballet but Bollywood; he watches as many as three films a week at home in a private theater. “You need some amount of escapism in life,” he says. “Those two or three hours give you relief.”

He has a legendary appetite, but mostly for the food of the bustling Mumbai streets. He has been known to walk out of fancy restaurants in search of dosas, south Indian crepes sold by the roadside. And he carries those preferences with him when he travels.

Classy or not, anyone who watches Bollywood movies and scours the streets of Mumbai in search of dosas earns instant street cred with us.

Remember cultural assimilation? This man is every nightmare come true for the pro-assimilationists.

He recalls “a lot of emulation” of Western ways surrounding him as a child. “My view was: ‘What the hell, man! We can do what we feel like.’ I think what has changed now, and it is changing in multiple generations, is this self-confidence and self-belief.”

The article goes on to talk about his family life, brief stint at the Stanford MBA program and the public feud he had with his brother Anil after their father’s death to control the empire.

Looking at the company structure gives an indication of the kind of obsession Ambani has with his business ……

DRIVE past the Makers Chambers IV building in Mumbai on a Saturday night, where Reliance’s headquarters are housed, and you often see the lights blazing inside. Mr. Ambani routinely enters the office after 11 a.m. and stays as late as midnight — even on Saturdays. Employees, eager to follow their leader, usually do the same.

Reliance, like many of its peers, is something of a hierarchical, old-style Indian enterprise, despite its accomplishments. Companies like these are typically run by a big family, whose word is law and whose patriarch’s photo, garlanded with flowers, is everywhere. They tend to have a layer of courtiers below the ruling family who are valued for loyalty as much as merit. Playful disagreements are tolerated, but the boss is often insulated from actual criticism.

…. and the lengths he is alleged to have gone to further the cause of his company.

In addition to keeping a tight rein on employees, the old-style companies tend to work hard at “managing government,” as their executives call it. Sometimes that involves outright bribery of government officials; sometimes it might involve paying the American college tuition of a bureaucrat’s child.

Although rumors that it actively engages in bribery swirl around Reliance, Mr. Ambani says it has never paid a bribe or broken a rule. “These are all fables,” he says, dismissing the rumors.

But he concedes that there are indirect ways for Reliance to curry favor. Although he says Reliance “never” pays the tuitions of bureaucrats’ children, he also acknowledges that foundations controlled by or affiliated with Reliance sometimes have.

“Some foundation would have given some scholarship maybe, but that’s all out in the public domain,” he says.

Unfortunately, a by-product of the “license raj” that made him one of the toughest businessmen in the world. There is also some discussion on political lobbying - desi ishtyle - which includes spying on the babus (bureaucrats) to collect information that makes them “vulnerable”. El Padrino, anyone?

Another unfortunate result of these kind of invasive tactics, is the corruption of the media.

Critics say Reliance has been especially effective at managing the press. Both former Reliance executives, who requested anonymity for fear of angering Mr. Ambani, say the company has actively curried favor with journalists to help it track the progress of negative articles. A prominent Indian editor, formerly of The Times of India, who requested anonymity because of concerns about upsetting Mr. Ambani, says Reliance maintains good relationships with newspaper owners; editors, in turn, fear investigating it too closely.

Ambani discusses an interesting concept to have India compete with China in the manufacturing sector.

“The next big thing is how do you create manufacturing with decentralized employment,” he says. “The Chinese have got very disciplined top-down systems. We have our bottom-up creative systems.”

He mentions products like handmade leather sandals from the Sugar Belt a few hours south of Mumbai, tie-dyed Bandhani saris from Gujarat, artisanal pottery, clothes, jewelry and the like. These wares would be produced in rural areas, sometimes in a villager’s own home. Reliance would forgo manufacturing them and instead teach residents what to make, gather the wares from disparate villages, oversee quality and market and distribute the products.

If Reliance is able to achieve that, it’ll be a revolution of sorts. Over the past century, we’ve become accustomed to big corporations hiring infinite number of employees and turn into bumbling bureaucracies, which is one of the premises behind Roger Lowenstein’s “While America Aged”. If Ambani can harness the vast labor force of India in an organized manner without really hiring most of them as employees, the upside is tremendous for both parties.

Comparing him to Rockfeller and Carnegie, the article wonders if Ambani’s attitude is a future indicator of the nation’s attitude as a whole, where people embrace who they are instead of trying to ape others.

His preferences reflect a wider cultural transformation in India, admirers say. “If you look at his interests, they’re very rooted in India,” says Nandan M. Nilekani, co-chairman of Infosys Technologies, a leading outsourcing company in India. “He’s not trying to impress anyone else. It’s part of a broader shift in self-confidence that is happening, where people are no longer looking at Westernized symbols of having arrived.”

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