Leadership – A case Study

The ability to inspire others: Sunil Bharti Mittal

Introduction

For organizations to develop they require a direction. The people who manage the
business provide the direction. Taking responsibility for making decisions and running a
business well is a skill. Management involves control and organization to get something done. In
the course of business, managers use many different skills. They:

• plan and organize people and resources

• set and monitor budgets
• control operations or services in order to meet customers’ needs.

The ability to manage is essential at all levels in the organization. However, for a
business to excel, leadership is vital. A leader is somebody who sets the direction and inspires
other people. A leader is able to influence others in meetings or when making decisions. This
helps to achieve the goals of the organization. Enterprise has leaders at all levels of its
business, not just senior management. Some people are natural leaders. For example, the
captain of a school Cricket team will probably have the ability to influence others. Leaders can
also develop through training and education.

A dreamer, an achiever

He has the knack to strike at the right place at the right time. His contribution in shaping
the modern telecom industry in India earned him the sixth place in the Forbes list of ‘India’s 40
Richest’.

Although he belonged to an influential political family, he chose to become a first

generation entrepreneur. He started his first venture in 1976 with a capital investment of
Rs.20,000 ($487) for a small bicycle firm at Ludhiana city in the north Indian state of Punjab, but
soon realized that the potential to scale up this business was limited.

He shifted his focus to import and distribution operations in Mumbai, India’s financial
capital and New Delhi, country’s national capital and started importing portable generators from
Japan. The flourishing venture, however, faced a sudden road-block when the government
banned the import of generators as it awarded licenses to two Indian companies for
manufacturing generators in India.
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 However, during a trip to Taiwan he came across electronic push button phones. He
sensed an opportunity, as only bulky rotary phones were available to Indian users that time. In
1982, he introduced the push button phones to India. This was the first experience of Indian
consumers with modern age telecom. He formed Bharti Teletech Ltd and started manufacturing
push button phones in technical tie-up with Siemens AG of Germany. His company is now one
of the largest manufacturers of telephones in the world.

The real opportunity for Sunil came in 1992, when the Indian government awarded
licenses for GSM mobile phone services first ever in the country. Armed with considerable
experience in telecom manufacturing, he secured the licence for offering mobile phone services
in Delhi. His company Bharti Cellular Ltd started mobile phone operations in 1995 under the
brand name AirTel.

The initial years of the cellular business were not as rosy as they are today. The role-out
of telecom services required a lot of initial investments and the returns were not adequate due
to the low subscriber base. With the help of private equity investors and foreign partner
Singapore Telecommunications Limited, Singapore's largest telecommunications company, he
successfully met the challenges of capital intensive role-out, cut throat competition and policy
changes.

Sunil has expanded the single circle mobile phone service in to a pan-India integrated
telecom company with market capitalization of about Rs.1,500 billion ($36 billion), the third
highest in India after Reliance Industries Ltd, largest private sector diversified conglomerate and
Oil & Natural Gas Corporation Ltd, state owned largest oil refiner.

After establishing Bharti AirTel as the largest telecom service provider among the
private telecom operators in India, Sunil Mittal has turned his attention to new opportunities such
as Retail, Agro-exports and Life Insurance. Also, he has just been elected as the President of
the Confederation of Indian Industries (CII), a non-government, not-for-profit, industry led and
industry-managed organization.

Bharti's "Professionally Managed, Entrepreneur Supported" model

Responsibility towards employees: Employees is one of the most important drivers of
growth and success for any organization is its people. At Bharti AirTel his Mantra for employee
delight focus on 5p’s.

•People
•Pride
•Passion
•Processes and
•Performance

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According to Sunil Mittal essentials to build a strong place in competitive market are

•Ability to take decisions amidst uncertainties

•Reading customer mind and predicting the future consumption trend.
•Keep your speed double to the change in market.
•Alignment of organizational objectives & employees’ aspirations.
•Quickly respond to changes in macro environment.
•Build a learning organization.
•Retaining talent
•Building a team by recruiting talent.

Extract from Sunil Mittal's interview to Forbes India.

When we started out, we were an entrepreneur-led, entrepreneur-promoted company.

We did a great job. In some companies, this phase lasts forever. Nothing wrong. But in my view,
if you do that, you remain small. You can’t manage a large company using this model. So we
moved to the next stage — entrepreneur-led and professional-supported. Over the last four
years, we’ve moved to professional-managed and entrepreneur-supported. And that’s where we
want to keep it.

There is one more stage — professional-led and professional-supported. Vodafone is in

this mould...No single shareholder is dominant...Parts of our organization were moving to the
professional-led and professional-supported model. I had to pull it back because I figured they
were becoming too bureaucratic. Things didn’t move; too many approvals were needed; too
many emails. That is something we want to avoid...You must feel like the deer in a forest, which
is always afraid of being attacked. Else you’re dead.

Entrepreneurs do it intuitively. For professionals, it is part process and part intuition.

When we wanted to outsource our network, it was considered blasphemy. Akhil [Gupta] and I
spoke about it many times. I know how many obstacles he had to face to take it through.
Everybody was dismissive of the idea. Sometimes, seniors will not only say this isn’t good, they
will work hard to ensure it isn’t good. I had to protect him. That’s where the professional-
managed entrepreneur-supported model comes into play. I said let’s go...If I were a professional
CEO and even if I had the guts to take on the board, I don’t think I would have got the approval.
The board would have batted on the safe side.

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India’s 'Wireless Wonder'

Naming India's Sunil Mittal as Asia's Businessman of the Year 2009, Fortune Magazine
calls him a 'Wireless Wonder' who has built a mobile-phone empire by turning outsourcing on its
head. Now the founder and CEO of India's leading mobile company, Bharti AirTel, is plotting a
retail revolution with a new partner - Wal-Mart, said the magazine in the cover story of its
international edition.

India's No. 1 mobile provider with subscriptions shooting past the 30 million mark is
expected to report revenue of more than $4 billion in the fiscal year ending March, up from $509
million in 2003. Bharti, which lost money every year until 2003, has posted rising profits every
year. Its stock is on a tear, rising to more than $14 a share on the Mumbai exchange in late
December, a fivefold gain since 2003. With a market capitalization of $26 billion, Bharti has
emerged as India's fourth-most-valuable firm, and Mittal one of India's richest men.

In 2004 he signed contracts worth $400 million to hand over operation of Bharti's entire
phone network to Sweden's Ericsson, Germany's Siemens and Finland's Nokia. The deal
means Bharti no longer has to worry about buying and maintaining equipment. Instead it pays
the European vendors a fee determined by customer traffic and the quality of service the firms
provide. That same year, Mittal signed a ten-year, $750 million contract with IBM, farming out
the bulk of Bharti's information-technology services, including billing, management of customer
accounts and even operation of the Bharti intranet.

The IBM contract is a revenue-sharing arrangement, but the objective is the same as
the deal with the European equipment vendors: freeing Bharti to do what it does best -
marketing, devising new services for its customers, and searching for new business
opportunities.

Now Mittal is forging his most audacious foreign partnership yet, Fortune said. In
November he announced that Bharti Enterprises will team with Wal-Mart (Charts) to transform
India's underdeveloped retail market.

Terms of the alliance, structured to end-run Indian restrictions barring foreign

investment in any retail operation offering customer’s more than one brand, grant Bharti full
ownership of stores selling directly to Indian consumers under the Wal-Mart name.

Bharti and Wal-Mart will form a separate joint venture to take on back-end activities in
which overseas investment is permitted, including wholesale, logistics, supply-chain
management and distribution. The companies haven't disclosed who will own how much of the
joint venture. But Fortune citing Mittal says he will open hundreds of stores over the next five
years in formats ranging from super centre to neighborhood market, and he predicts investment
in the venture will exceed $1 billion.

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Level 5 Leadership

Conclusion

Management is about getting things done. Leadership is about achieving goals by

creating a direction for a business and inspiring employees to take initiative and make the right
decisions. Enterprise managers need the skills to motivate, lead and influence others.
Enterprise aims to employ people who can take on a leadership role and help to grow the
business for the longer term. Its management and training programmes help to provide
employees with the skills necessary to lead others.

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 This case study illustrates that individual differ in many ways, including personality,
values, attitudes and style of thinking and decision making. There are two leadership styles that
rely strongly on the Individual leader personal characteristics, which are Transactional leader
and Transformational Leader. Depending upon the circumstances, leaders will use different
leadership styles, by developing leaders who are able to make decisions at a local level,
Enterprise can respond more closely to customer needs within a competitive service industry.
Its high levels of customer service provide it with competitive advantage over its rivals.

Questions

1.How did Mittal rise to the challenge of managing breakneck growth?

2.How do Level 5 leaders manifest humility?

3.Bring out the Instances from the case where “Sunil Bharti Mittal is a classical example
of Level 5 leader.

4.Do you think whether Sunil Bharti Mittal is a Transactional Leader or Transformational
Leader? Justify your answer from the above case?

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