Lakshmi Mittal: The man who can spin troubles around

INDIA: This is not a eulogy on how he made it to the world's hallowed rich billionaire lists or how he has joined the pantheon of enviably-successful businessmen. This is a quick moment spent on dwelling the amazing legerdemain that this steel baron has showcased with every nose-diving company that he picked and just turned around into another brilliant example.

It says a lot about how Lakshmi Niwas Mittal could spectacularly extend Ispat from a wire rod manufacturer in Indonesia to the halls of the largest steel producer in the world. Most of it, as has been spotted by experts was through a sharp acquisitive strategy and a phenomenal change management instinct.

Today, the business corridors better know him as a turnaround specialist, thanks to the panache with which he buys up steel mills that were operating at a loss, and turns them into profitable enterprises like magic. But every magic has logic, a trick not so ephemeral.

It may sound atavistic now but there was a time as back in the 1980s when Mittal was scouting for international expansion outside Asia. Incidentally, that's when many state-owned steel plants were being sold at sharp discounts. He did not let the right time slip by and jumped for a good bargain like a smart businessman. But apart from that, and beyond that, it was all about how he could make the bargain a long-term pride to reckon with.

He has espoused the development of integrated mini-mills as media has reported widely and created an impactful step in the use of Direct Reduced Iron (DRI) when it comes to using it as a scrap substitute for steelmaking.

Like a smart catalyst, he has often added manufacturing facilities whenever the steel industry has seen a dip, a habit that probably started as early as Indonesia in 1976, when he bought mini steel mills using the DRI and then made them profitable. Like in 1992, when Mittal acquired a Mexican steel mill, or other instances, Mittal has etched a clear strategy of mini mills becoming integrated producers through the use of scrap alternatives.

A good example would be that of Sicartsa II which is observed majorly as a case study for management scholars. In the early 1980s, the Mexican government decided to build new steel but the timing was unfortunate while it approached completion and as the end of the oil boom coincided with an economy that was in bad shape; investment got choked up.

Now as the ambitions of planned plate mill started gathering dust, the plant started selling intermediate products like steel slabs, and went into a spiral of operating losses. Enters today's steel czar Mittal, who after a deep due diligence, and a broad negotiation exercise; took control and turned it around, It can be seen how with Imexsa that had to even shut down the furnaces due to recession and lack of orders; did not lay off many people. Mittal's formula of sitting down with management and looking for real improvements and consequentially baking a sound business plan have always worked, usually.

Other ways like instilling a ruthless cost-consciousness, required financial and operational abstinence and discipline among the managers as well as employees help too.

Day top day problems are often resolved by open discussion and there is no room, whatsoever, for any kind or shade of red tape. The system of daily reporting and meetings has been seen to play a vital role with such acquisitions. High goals are set and then accomplishments are visibly rewarded making everyone stretch one's perceived limits. To add to that a stringent focus on quality interventions; strict benchmarking; working with customers and suppliers to evolve future solutions; internal service agreements; efforts to integrate knowledge or service delivery levels all go a long way on embracing change positively.

Over the years, Mittal has exuded exemplary work of how any loss-making unit can be literally turned around if one has the right change management posture and the right energy.

Even steel can help with a Midas touch, as he has shown and will continue to show ahead hopefully.