The third edition of Indian Marketing Awards, organised by exchange4media, saw Marico’s Chairman Harsh Mariwala being bestowed with the Lifetime Achievement Award. The billionaire businessman, whose net worth is pegged a little over US $3 billion by Forbes, minced no words when asked to address the demonetisation of Rs 500 and Rs 1,000 currency notes.
“Looks like short term pain (as a result of demonetisation) is under-estimated and long term gain is over-estimated,” he remarked on the policy decision that has hit the life of common Indians. Earlier, Mariwala expressed his happiness on receiving the award and wondered whether it meant the end of his professional innings.
“This is my first so-called lifetime achievement award so I am wondering whether my life is over. Nonetheless, I am very happy,” he said. He also chose to elaborate on the five big lessons that he learned during his business career.
Mariwala stressed on the need for pioneering products with a differentiated appeal to succeed in the competitive market. “Innovation is just not ideation but ideation combined with good execution makes a difference,” he said. Marico’s Chairman claimed that his company happened to be market leaders in various products which resulted in 90% of its entire turnover.
Citing the example of Parachute hair oil, he highlighted the limitless possibilities arising out of innovation. “We indulged in innovation of various forms of plastics i.e. wide mouthed bottle, one rupee mini bottle and a bottle which was probably different in terms of duplicates. I think all that has helped the brand in terms of market positioning,” he stated.
Going further, Mariwala opined that choosing the right domain was critical for a product. According to him, Marico made pioneering contributions like Kaya Skin Clinics and Saffola, initiatives the industry had never seen before. Other innovations that found a mention in his speech included Saffola Masala Oats, a disruptive endeavour that enabled Marico capture over 70% market share, and the acquiring of anti-lice shampoo ‘Mediker’ from Procter & Gamble.
Describing innovation as a continuous process, he added, “Once you reach that market share, you have to go on working on your products. Innovate and ensure that you retain that market share.”
Acquiring talent & organisational culture
Talking about the initial days at Marico in the early nineties, Mariwala narrated how he hired the staff from different Indian companies and multi-national corporations. He recounted the manner in which the company’s core values came about after exhaustive internal decisions. The need for explicitly stating the company’s ideology arose because it had brought together different shades of professionals having distinct ideas on profitability and product.
“Arriving at values is easier but creating those values into culture is very difficult. It requires a lot of effort to build a strong culture in an organisation,” he mentioned. He also spoke about developing a trustworthy relationship with employees.
In pursuance of the same, Mariwala’s Marico gave employees the liberty to maintain their own leave records. The company also did away with expense statements and employees were no longer required to go to their bosses for reimbursement. “These are ways of telling the employees that the organisation has trust in you,” he said.
The Mumbaikar noted how the consumer goods company was different from MNCs. “All decisions at our place are taken in our headquarters in Mumbai as against multi-nationals whose headquarters are located somewhere outside India. Hence, a lot of decisions get taken by people who are sitting far away and the empowerment levels are a little lesser,” he argued as he maintained the necessity of high levels of empowerment.
Meritocracy is another key feature in Marico’s family-managed business. As per Mariwala, they invest a lot in hiring good talent and encourage youngsters to take risks. Brushing aside fears of failure in entrepreneurial quests at Marico, he said, “We wanted to encourage risk taking and innovation. We said we want experiments and we will not punish failures.”
Growth over profitability
In the last bits of his speech, Mariwala explained the modus operandi behind achieving profitable growth. “Growth is very important for any organisation. It is like oxygen. It satisfies all stakeholders whether it is shareholders, employees, associates or customers,” he asserted.
Defining growth in terms of profitability and sustainability, he also flagged the importance of patience. He felt that while the growth mindset has to begin at the top of any organisation, it must go down till the bottom. For this very purpose, it is important to look beyond short term output.
At Marico, Mariwala took employees into confidence by giving them a time period of as much as 7-8 years in the case of new products to arrive at breakeven figures. “We should pursue growth first as long as we see profit over a period of time,” he boldly commented.
Speaking from a corporate governance viewpoint, he said that the interest of the company is foremost. He hailed his personal decision to step down as the company’s Managing Director in the best interest of the organisation. “I never thought I will step down at the age of 63. I had kept myself a target of 65,” he said. He did not regret doing so since Marico benefitted out of it.
The age of cut-throat competition requires high efficiency from employees. If such competence is missing from the top brass, Mariwala sounded the need for tough decisions as fruitful companies cannot afford weaklings at the top. “You can be very good at one stage but if that person is not able to perform, it is better that we help them with some other options,” he said adding that they must be given a couple of months to find alternatives.
Lastly, Mariwala chose to remind companies of their duty towards the society and raison d’ être. He stated that organisations exist not for shareholders but combined stakeholders. “We feel very strongly about walking that extra mile in making that extra contribution to all our stakeholders,” he concluded.
The Indian Marketing Awards 2016 were presented by Sakal Media Group and powered by &TV.