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Industrialist Kumar Mangalam Birla, Chairman of Aditya Birla Group, on Tuesday penned his reflections of the past year and the major turn of events amid the Covid-19 pandemic.
Writing “the epilogue” to the last year Birla said that, “2020 is a year that will only gain in significance when viewed through the perspective lens of time.”
“We have started the New Year with a strong sense of hope and optimism. This is not just because of the success in speedy development of the vaccine. It is also to celebrate, for having endured, survived, and overcome the challenge of a grave pandemic,” wrote the business magnate.
Also read: 11 months, over 70 mn cases, and 1 invisible virus has upended the world: Kumar Mangalam Birla
“Personally, it was energising to see corporations — large and small join this collective fight,” he added.
Pandemic pain
According to Birla, 2020 and the pandemic has reinforced the importance of the role that corporations play in societies at large.
“In this new paradigm, the licence to operate has to be earned, and is underpinned by respect, credibility, and acceptability,” he wrote.
The Aditya Birla Group chairman further shared examples of how small and large stakeholders worked in tandem through the pandemic.
“This was manifest in several actions like allowing deferred payments to hard-hit value chain partners, honouring commitments on orders to maintain business continuity, and even investing ahead of revival in demand to kickstart economic activity,” wrote Birla.
“These are not acts of corporate benevolence, but they recognise the symbiotic nature of the various components of a functioning economy. The symbiosis also creates resilience to better absorb volatility,” he added.
Volatility and uncertainty
Birla further emphasised how the pandemic has furthered volatility, adding that one should not get “unruly distrubed” by such volatility.
“While volatility and uncertainty have been an underlying phenomenon for almost 2 decades now; financial variables have become even more volatile in these unusual times,” he wrote.
“Such volatility sometimes is a frothy surface that floats on top of business and economic tides that move in a much more predictable fashion. It is far more important to focus on core economic and business variables, the demographic drivers of market trends, and the technological drivers of supply chains,” he added.
Birla emphasising on the recovery across sectors wrote, “In India too, the initial prognosis and narrative of experts proved to be excessively pessimistic.”
“Witness the strong recovery across manufacturing sectors, cement to paints, and automotive to aluminium. Several indicators for India, including GST collections, electricity demand, railway freight movement, and passenger vehicle sales have reverted to positive growth numbers in recent months,” he wrote.
“Perhaps, we still need another quarter or so to confirm that this booming trajectory is here to last. The economists, I am told, are now searching for alphabets that will adequately describe this trend of cautious optimism. However, outcomes at a company and individual level are uneven,” he added.
Advice to businesses
Birla further advised businesses to be mindful of good management practices. Just as the Covid-19 has been more crippling for people with comorbidities, the analogy can partly be extended to businesses as well, according to Birla.
“The excessive financial leverage that provides sugar highs while weakening fundamentals in the long term, lax processes that lead to inventory build-ups clogging supply chain arteries like some pernicious cholesterol, or most devastating, a lack of focus on building consumer and human relationships. These are comorbidities that can prove fatal when pandemic-type shocks rock the system,” he added.
Covid impact
Talking about the impact of the pandemic on the future of work, Birla said that he had a “slightly contrarian view” with regard to work from home.
Sharing his views on how the ‘Office’ contributes to building the work culture and increasing diversity, Birla wrote, “I do expect most companies to revert to the pre-Covid workplace equilibrium in large parts, once the pandemic is quelled.”
As his most important advice, Birla urged people and businesses to build their reserves.
“Now is perhaps a good time to take stock of each of our personal reserves and the meaning of our work,” he wrote.
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