How Brijmohan Munjal rebuilt his company – twice?

A nice piece from BS edit team on BM Munjal’s legacy (calling him a true hero):

Brijmohan Munjal belonged to a generation of business leaders who built their empires from scratch in an environment with a licence-permit raj and artificially limited markets – a world removed from today’s India. But only a handful of industry leaders from that era were able to make a seamless transition into the demands of a post-liberalisation India. The late chairman-emeritus of the Hero Group, who did exactly that, would often tell his friends the following story: In the days of the licence raj, it was easy to get tempted and make money through a licence for a commodity in short supply, such as steel sheets, oil or even power, as these could be traded in the market for a handsome profit. But Hero Group, which had a licence to buy steel sheets, never ever thought of doing that and instead focused on making bicycles. He travelled extensively, not just to acquire knowledge on new technologies and designs, but also to learn the best practices followed by global firms, particularly in Germany.

In the process, Munjal did all that it takes to build an industrial group based on a sustainable business model. His vision allowed Hero Group to rapidly overtake well-established rivals and become the world’s largest cycle maker, and Hero Motocorp the world’s largest two-wheeler manufacturer by volume. He positioned his motorcycles as more fuel efficient than scooters, which struck a chord with cost-conscious Indian buyers. The “Fill it, shut it, forget it” campaign remains one of the most effective ones in the country’s corporate history. In the 1980s, organised dealership networks didn’t exist; companies produced and sold through traders. When Munjal changed that system, it was thought to be ahead of its time – but, eventually, that distribution mode became an entry barrier for many of Hero’s competitors. His relationship with dealers was so strong that till his last days as chairman, he would remember most of the 1,000-odd dealers of Hero MotoCorp by their first name. Forging partnerships and nurturing them into strong relationships were clearly his hallmarks.

That’s not all – when the time came to end a 26-year-old alliance with Honda in 2010, when the latter wanted to launch its own branded motorcycles in India, Munjal took charge of rebuilding the group all over again and decided to replace the Hero Honda brand much earlier than the June 2014 deadline set out in the joint venture agreement. That showed extraordinary self-belief, at a time when the company was trying to come out of the shadow of Honda’s technological excellence. Munjal, 92, who passed the baton to his son in June this year, will always occupy a prominent place in India’s corporate history for his ability to do all this – and still live a life on the principle that if you work hard and be good to people around you, success in business will follow. After all, in the dog-eat-dog business world, it’s not often that you find one of your strongest competitors referring to you as his “business guru.” Rahul Bajaj did precisely that not only after Munjal’s death, but many times during the great man’s lifetime.

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