Birla Group’s Dual Strategy: New ‘Bifocals’ for Business Diversification and People Policies

The Aditya Birla Group, a major Indian conglomerate with interests in areas such as cement and fashion, is working on a new strategy to manage its diverse business operations more effectively. According to industry insiders, the group is discussing a “bi-focal” approach with consultants and advisers. This approach will involve applying different policies to its older and newer businesses.

Dual Approach for Different Business Segments

Under this new dual strategy, the group plans to manage its long-established sectors like cement and textiles with one set of policies, while newer ventures like paints, jewellery, and digital platforms will follow different guidelines. This change is aimed at addressing the specific needs of these diverse business areas.

The Aditya Birla Group, which was founded in 1857, has expanded into various new segments over the years. These newer areas often require a different management style compared to the group’s traditional businesses.

Changes in Employee Policies

To support this strategy, the group is also considering changes in its employee policies. This is intended to attract and retain talent that is better suited to the needs of different customer segments. Ashok Ramchandran, who became the group’s director of human resources in January, has started implementing initial changes to align with this new strategy.

Ramchandran mentioned that while the group regularly reviews its people processes, no major overhaul of policies is currently planned.

Shift to External Hires and Simplifying Structures

Back in 2016, the Aditya Birla Group introduced a policy called ‘2x2x2’ to develop internal talent by assigning key roles to employees who had worked in at least two geographies, two functions, and two businesses. This was part of a five-year plan to build a strong internal talent pipeline and reduce reliance on external hiring.

Now, the group is exploring ways to make its decision-making process quicker. According to a second industry insider, the group is having initial discussions on simplifying its internal structures to speed up decision-making.

Ramchandran noted that the group has a “well-oiled system” for hiring experts but emphasised that being quick to market is crucial. He added that the group has always empowered its businesses responsibly and is focused on improving organisational design, structure, and talent management.

Focus on Brand Image and Market Capitalisation

The Aditya Birla Group is also looking to enhance its brand image and market capitalisation. Recent discussions with advisers and senior management have underscored the need to boost the group’s brand presence in the market.

The group recently reached a market capitalisation of $103 billion, making it one of the top companies in India in terms of market value, just behind Reliance Industries Ltd, Tata Consultancy Services Ltd, and HDFC Bank Ltd.

Ramchandran remarked that market capitalisation reflects various factors and expressed satisfaction that the market recognises the group’s consistent performance, resilient ways of working, and future ambitions.