Why L&T’s AM Naik chose to be a manager and not an entrepreneur

AM Naik, non-executive Chairman of Larsen & Toubro will step down from his post on September 30.

Anil Manibhai Naik (81), the Non-Executive Chairman of Larsen and Toubro (L&T), said he is not mentally geared for starting anything small, looking back at his six-decade-long career leading the construction behemoth.

Talking exclusively to Moneycontrol ahead of his last annual general meeting (AGM), he said that when he decided to start an IT business, which was completely different from L&T’s core business, he had the company’s backing.

"If I had to start IT on my own, I would have to create a small start-up, and I am not mentally geared for starting anything small; anything less than a billion is not on my mind," Naik told Moneycontrol in a recent interview.

Naik said that while ownership has not been an aspiration for him for the longest time, keeping him away from the entrepreneurial journey, the many hospitals and schools that he has set up give him the satisfaction of creating something.

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One of the tallest leaders of India Inc, Naik has been credited with single-handedly growing L&T and shielding it from takeover bids. He has been the mastermind behind the many diversifications of the $23-billion engineering major.

Naik said he was unstirred in the face of such challenges, for, he said, they were a driving force throughout his career.

"The most challenging times were 2003 and 2004. Did that give me sleepless nights? Maybe one or two nights would go sleepless, but otherwise, I slept well because I looked at every challenge as a hobby and I enjoyed it. Without challenges, I am a little unhappy, and I get tense," he said.

Naik, who chose to become a manager over an entrepreneur, advises start-up founders not to rush into their ventures, as haste may lead to failure.

"In general, I want to advise them not to rush into anything just because they want to be another billionaire. Everyone doesn't become a billionaire; eight out of 10 may not succeed. They don’t succeed because they rush without proper study on what they are starting and how they can stand up to others who are anyway doing the same thing in South America, China, Japan, or the US," Naik told Moneycontrol.

Naik was born on June 9, 1942, in Gujarat. He holds a degree in Mechanical Engineering from Birla Vishvakarma Mahavidyalaya Engineering College, Gujarat. His father, Manibhai Nichhabhai Naik, was a freedom fighter who quit his job in a Mumbai school to contribute to rural India.

"I was not an IIT graduate because my father went to a village, but destiny brought me to L&T. I believe the best students of second-level colleges are better than the bottom quadrant of first-level colleges," said Naik.

According to the L&T head, the company also largely depends on training talent from mid-tier engineering colleges and not ‘flying engineers who will go to other industries.’ Naik said that today, the whole industry has sourced professionals from L&T.

The L&T chief, who has been made Chairman Emeritus, pegs L&T’s next phase of growth on its talent, leadership, and entrepreneurial thinking.

"When the opportunities come, we must know which one to pick. We should never do anything that will be less than $1 billion, even if it looks small now. Scale and speed will be important. You must create a size that is economically viable and make sure that you are ahead of the competition," Naik added.