The 28th of December 2022 marked the 89th birth anniversary of Mr. Dhirubhai Ambani, the founder and the driving spirit behind the Reliance group. This day is celebrated at the Reliance group each year as the Reliance Family Day.
Addressing the Reliance family on 28-December, Mr. Mukesh Ambani outlined some interesting aspects on the journey of Reliance and left with some points to ponder for the future. He spoke at length on the growth story, the big business focus shift, the underlying dream of the group and also on the power of Gen-next. Here is a gist.
How the Reliance group reinvented itself?
In his 1990 bestseller, “Who says Elephants can’t dance”, Lou Gerstner chronicles how IBM was almost brought back from the brink with a sharp shift in focus. Lou Gerstner is the former CEO of IBM and had driven this big shift. In a way, it was always believed that large companies become unwieldy and hence cannot change.
One of the aspects that Mukesh Ambani highlighted in his address was how the Reliance group had made 4 important shifts in its business strategy.
- Ambani focused on how the group had re-engineered its energy business with a focus shift to green energy and materials. The oil refining business will continue to be the cash cow for some more time to come, but the incremental investments in energy will be in areas like alternate energy, green hydrogen and EV infrastructure.
- The second big shift was how Reliance had made a mark in the retail sector. The Future-RRVL deal may still be held up, but the company has worked towards creating a complete retail ecosystem. More importantly, the focus has been on integrating millions of Kiranawalas with the power of cloud and WhatsApp communities.
- Thirdly, Mukesh Ambani focused on how their digital franchise led by Reliance Jio had achieved the highest subscriber level in less than 4 years. In addition, Jio had also brought fibre to over 40 lakh homes and commercial establishments. Above all, digital is the second largest contributor to Reliance EBITDA after the O2C business.
- Finally, he also highlighted the pioneering work done by the Reliance Foundation, in areas of social responsibility, especially in getting assistance to the needy in times of the COVID-19 pandemic, including the use of Jamnagar facility to produce oxygen. He underlined that a large business would not justify itself without a social purpose.
Living by the Dhirubhai Ambani business legacy
On the occasion of the birth anniversary of Dhirubhai Ambani, the chairman of the Reliance group recalled the 3 principles on which the founder had built the group and which should guide the group in the years ahead.
- He spoke about the need to avoid complacency. Ambani highlighted that in any business, market leadership can be ephemeral. For example, we saw how a global leader like Nokia was pushed to the brink because it did not adapt to the smartphone shift. He draws the metaphor of a book with no final chapter. After all, a truly long lasting business model is one that constantly and continuously reinvents itself. Despite being India’s largest and most valuable corporate entity, Reliance Industries managed to reinvent its core focus areas in a short span of time.
- The second core philosophy that Mukesh Ambani highlighted was never to lose sight of its guiding principle “We Care”. It was essential that this core guiding principal should be the bedrock of the organization and must be constantly reiterated, underlined and communicated at all forums. He also added that the idea of “We Care” extended to all stake holders including shareholders, financers, investors, employees, partners and society at large.
- Finally, the third principle was to build an organization structure that outlasted the leaders. He reiterated that organizations are intangible and larger than the people who build them. He highlighted the need to trust the gen-next to take forward the legacy with new ideas, new enthusiasm and a new world view.
Did Mukesh Ambani talk about succession?
Indian media has often been adept at picking up quotes in isolation and giving a twist to it. A lot of press reports referred to the last point above as an indication that it referred to succession plan at the Reliance Group. That is a rather rich interpretation.
The gen-next at Reliance are already driving most of the new-era businesses like digital, retail and green energy. There is no doubt about who will take forward the Reliance legacy anyway. Since the days of Dhirubhai Ambani, Reliance has counted heavily on young leadership. This statement is just an extension of that philosophy.