RIL AGM | Founder’s mindset keeps Reliance ahead of competition, and prepared for future opportunities

Reliance Industries Chairman and Managing Director Mukesh Ambani (file image)

It was July of 1989. This author was then a newly-minted manager at one of the largest detergents manufacturers in India. Returning from a business trip to Chennai (then Madras), I landed at the old Santacruz airport in Mumbai when the heavens broke over the ‘Maximum City’. There was not a single taxi at the airport.

The last Indian Airlines city bus, packed as sardines, was about to leave for Nariman Point. The driver of the bus, seeing my plight, totally drenched in the rain, suitcase in hand, asked me to get on through the chauffeur’s door, and squeezed me next to his own seat.

Getting off at the Mahim junction in waist deep water, I trudged my way home to Bandra. Before I could change into dry clothes, the BSNL landline phone rang. At the other end of the line was Ramesh Vyas, the podgy and elderly sales head at Reliance.

He dropped a bombshell informing me that their Patalganga Plant was under 30 feet of water, and had to be shut down. That meant Linear Alkyl Benzene (LAB), the main ingredient of synthetic detergent, of which Reliance was India’s largest producer, would be out of stock indefinitely, and we should activate alternate sources of supply, including imports.

What followed was a miracle on one hand, and the subject of a business school case study on the other. Reliance got the plant up and running in less than a month disproving all its detractors, and to the surprise of its international equipment suppliers.

I was reminded of this 30-year-old saga of beating all odds and even natural calamity, while listening to Mukesh Dhirubhai Ambani’s speech at the Reliance Annual General Meeting on August 29 talking of the ‘Founder’s Mindset’.

Seeing the Reliance of today, the memory of 1989 appears to be from a prehistoric era. A grand vision has been embedded into the Reliance DNA since its inception. So much so, sometimes one thinks the term BHAG (Big Hairy Audacious Goal) was invented seeing the Reliance story. Being the first Indian company to cross Rs 100 billion annual revenue, an EBITDA of Rs 1.25 lakh-crore, India’s largest tax payer at Rs 188,012 crore, and exports exceeding Rs 250,000 crore contributing 8.4 percent of India’s total merchandise exports, are testimonies of that grand vision. It is also reflected in the Rs 2 lakh-crore investment envisaged in its True 5G network.

But what truly defines the ‘Founder’s Mindset’ is not only staying ahead of competition, but surprising the world by continuously reinventing itself by preparing for the future. Nothing can illustrate that better than the success of Jio, which has been the backbone of the Narendra Modi government’s game-changing JAM (Jan Dhan-Aadhaar-Mobile) strategy that Mukesh Ambani alluded to at the beginning of his speech.

Throughout its journey, Reliance has repeatedly proven its detractors wrong. It was said that the company excels only in a B2B environment, and customer facing businesses were not its forte (Vimal Textile is long forgotten history). By Jio (in contrast to Infocomm) Reliance has demonstrated the willingness and ability to learn from previous mistakes (of its own and others), and change the rules of the game.

This inspires confidence in its foray into the next frontier of retail that has already exceeded Rs 2 lakh-crore turnover, and Rs 12,000 crore EBITDA to become one of the Top 10 retailers in Asia.

However, what distinguishes Reliance from other players in the B2C or D2C space – be it in digital, media or retail — is keeping the consumer at the heart of the business with a mission to empower them, be it the individual customer or small and medium businesses. This philosophy when aligned to national priorities and vision of the leader becomes an exponential force multiplier.

Finally, the founder’s mindset has to manifest in its commitment to protecting and growing shareholders’ value and stakeholders’ interests by ensuring business continuity through succession planning. Without doubt the intangible asset of the founders’ goodwill constitutes a large chunk of enterprise value in any promoter-driven corporation. In this year’s AGM, Mukesh Ambani, formally anointed the custodians of the legacy of the founders to lead Reliance through the next phase of its journey as it were. This should instil a great deal of confidence not only to its huge family of shareholders, but all stakeholders and associates including the government.

A popular meme doing the rounds during the pandemic showed a corporate CEO being asked – “who changed your digital strategy?” His answer could well have been “it was Jio”.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.