TechManch: Marico’s Saugata Gupta talks about 5 trends that have shaped new-age companies
Gupta, MD & CEO of Marico Ltd, explains the traits & hallmarks that businesses must eye today to ensure future readiness & long-term success
The first day of exchange4media’s TechManch2019 had Saugata Gupta, MD & CEO, Marico Ltd, talking about some of the traits & hallmarks that businesses must eye today to ensure future readiness & long-term success.
Gupta, who was the keynote speaker, highlighted how 19th & 20th century was the age of dominance of traditional companies but the 21st century saw domination by a certain other set of companies.
Elaborating on what’s common among the new age companies, Gupta listed five trends. “Winner takes it all. If you look at any industry which is fast growing, be it telecom, e-commerce or airline, 5-7 years from now, only two or three will survive and they will take it all. Then there is scale & agility, frictionless customer experience, real-time decision making and customer obsession. For example, the kind of dominance Google and Wechat in China have had in the industry through mergers and acquisitions and scale and customer acquisitions is phenomenal.”
So, what is the difference between the traditional and new-age companies?
Gupta explained, “In traditional companies, we still report year on year growth, but new age companies talk about sequential growth, what was the sale last month and what is it now. This is what most companies need to do i.e. move from an annual growth rate to a sequential growth rate.”
“Second factor is the question of numbers. In the traditional companies, if you strike a percentage of 10-15 per cent, it is good. But in new age companies, if you hit any less than 50-60 per cent, it is no longer good. So the faster you scale up, the better for you. And in today’s world, there is no shortage of capital,” he added.
Going on to the next trend on the list, Gupta said, “Another factor is frictionless customer experience, like what is provided at the Apple stores or Dollar Shave Club. One of the reasons why big companies are acquiring smaller firms is not just about the fact that it is adding to their turnover, but because the learning in terms of operating model, speed and agility is far higher.”
“Then there is real-time decision making, which is a big change. Sometimes you have to take decisions in as less as 1 minute, especially if you look at media feed on Facebook. Earlier, we used to wait for a fortnightly magazine to give the news. Today you can watch the same in two minutes on digital and you can also analyse what is happening. So the response time has changed drastically. And lastly, if you look at Amazon or Disney or companies that have done really well of late, you will realise that customer obsession has a big role to play. Customer is the king for all of them,” said Gupta.
Summing it up, he spoke about how the FMCG industry, which he has been working in, has been disrupted. “It has been at a pace slower than that of telecom or banking, where I don’t remember having to visit a branch in the last 4-5 years. I don’t need to do that as everything is available online. While we have not achieved the ‘iphone moment’, CPG is being disrupted and the kind of changes that will take place in the next 4-5 years will be unprecedented.”
Gupta went on to give examples of brands, such as Chobani, that are doing exciting work at the top. He believes that the reason why they are successful and getting investments is because they give authentic individual experience.
“Lot of new age brands mistrust advertising and they function through content marketing. Due to the social media wave, conversations have become one-to-many and many-to-one. The average shelf life of a CMO in the US is two-three years i.e. far less than that of a CEO. And communication is also no more about advertising today. It is no longer about making one communication and adapting it to various mediums, but about media neutral communication.”
Giving a personal example, he said, “I was recently searching for a digital transformation head, but couldn’t find one digitally aware person savvy enough to work for me who was above 35 years of age. So, we have introduced a bottoms-up approach, wherein the top leadership is being mentored by 20 digitally savvy individuals. If your top team is not digitally savvy, you cannot drive digital transformation in your organisation.”
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