'HUL is extremely supportive of mavericks, at the same time intolerant of rogues’

Sudhir Sitapati, Executive Director, Foods and Refreshment, HUL, talks about the making of ‘The CEO Factory’; excerpts from the book

e4m by Srabana Lahiri
Updated: Dec 24, 2019 7:16 AM
Sudhir Sitapati The CEO Factory

Sudhir Sitapati, Executive Director, Foods and Refreshment, HUL, talks about the making of his book ‘The CEO Factory’, the many facets of HUL he discovered in the course of writing it and what he expects it to convey to readers

How long did it take you to write The CEO Factory? Please take us back to the idea stage, and tell us about the kind of research and effort that went into writing it even as you held the demanding and key position of Executive Director, Foods and Refreshment at HUL.

In a way, it took me 20 years to write the book but about four months to type it! I met my publisher Chiki Sarkar on something else and she said there’s a book waiting to be written on why HUL produces so many CEOs. I politely murmured something about being busy and forgot about it till, a few days later, I came across an old copy of HUL’s first annual report in 1958. HUL was a Top 5 private sector company in 1958, was among the Top 5 in 1986 when the Sensex was formed and it still is today. Over a 60-year period, the company had grown earnings at a rate of 15%. When I looked, there was no company in the world that had delivered so consistently for so long as HUL had. Chiki was right, there was a story waiting to be written.

I wrote the first draft of the book in a rainy week in July at my farm in Kashid, South of Alibaug. It helped that I had no access to the Internet or telephone. It was a shoddily written draft but had the bulk of the arguments. I then spent the next three months meeting people to find anecdotes that supported (or disagreed) with my arguments. When it came to editing, it helped that my immediate family has a market researcher and three authors!

You mention in the preface that it was a perilous job to write about a company while still serving it in a senior capacity. Did you at any point face a dilemma on what to tell and what not?

Not really. When I requested permission to write the book from our Chairman Sanjiv Mehta, I told him that I would write about HUL ‘warts and all’ but at the same time only write about contemporary issues if they were in the public domain. So the principles I used were write freely about the past, cautiously about the present but always honestly.

In the book, you talk of oldfashioned goodness, an unchanging value system and the rigorous training that ultimately churned out iconic CEOs at HUL. Do you think it still works for the younger crop of people today, especially in an ecosystem where a school dropout may well be the founder of a unicorn?

When I spoke to several generations of HUL managers, I realised that the concerns of the youth of our times is not unique at all to our times, but instead unique to youth. For instance, our former chairman Vindi Banga who joined in the 1970s told me about how he rebelled against his rural stint in Etah and our former vice chairman R. Gopalakrishnan who joined in the 1960s told me something similar. The HUL philosophy of a strong value system and rigorous training has broadly remained unchanged despite generations of moaning management trainees. It has worked in the past and I think it will work in the future as well.

You have spoken of the HUL approach to advertising and that there should be a single decision-maker, the advertising leader, from brief to production. You’ve also made a case for the briefest ‘brief’ to a creative agency. As a marketer, have you always followed that? Also, could you recall some really brief ‘briefs’ given by you?

I’ve not always followed it, but I certainly try and follow it most of the time. Maybe you should ask some of our agency partners whether they agree, though! Complicated briefs rarely get good creative output and multiple decisionmakers kill big ideas with a thousand cuts. The third killer of advertising is for the client to make suggestions to improve the film. Can the music be louder on the 22nd second, for instance. The job of the client is to feel the goosebumps in her skin and tell the creative, ‘This ad was to make me laugh and it doesn’t quite do that’.

If you recall the opening scenes of the Hindi film Izazzat where the divorced Rekha and Naseerudin Shah meet coincidentally in a waiting room, the awkwardness gets melted by a cup of tea. We watched several Hindi films after that and saw that tea often plays the role of melting awkwardness. So we gave a single line brief to the agency on Brooke Bond Red Label – ‘Tea melts awkwardness’ ¬– and we got this lovely film on a live-in couple whose parents suddenly barge in.

Could you recount some anecdotes or interesting conversation in the course of writing The CEO Factory?

Both on the cover, which is a throwback to the old Surf packaging, and the title, we had some interesting debates. I loved the cover, since I thought it was clutter-breaking (better famous than persuasive) but there were many who felt it was tacky. We had two working titles ‘The CEO Factory’ and ‘How HUL Works’. I personally preferred the latter, but thought the former would work better since people generally like benefits and not attributes (everyone wants to be a CEO!).

But in true HUL style and unique to the publishing industry, we tested these options in a digital market research and went with the retro Surf packaging and ‘CEO Factory’. We also used the test to estimate sales volumes for this book, which unfortunately is secret for now!

If you were to pick out a particular chapter as your favourite, which would be it and why?

I think my favourite chapter in the book is probably the one on HR ‘Throwing toddlers in the deep end’. HR practices have formed the backbone of the long term success of HUL and it was a personal journey of discovery for me. The idea that HUL, which on the face of it looks like a rigorous, processdriven and somewhat staid company, had actually a culture that was extremely supportive of mavericks while at the same time intolerant of rogues, was something I hadn’t realised before.

The CEO Factory has been called an ‘MBA in a book’… it has been very well received. What are your own expectations from it?

My main aim in writing ‘The CEO Factory’ is less to teach students and younger people how to become CEOs but rather to inspire them to build and nurture institutions when they do become CEOs. I think India in general builds good organisations that grab the right opportunities, but is less good at building institutions that last. HUL is one such and there is a lot to learn from it.

What are your plans going ahead? What next from Sudhir Sitapati? Do you plan to write another book?

My plans going ahead involve getting off the grid, drinking gin and tonic and listening to some good music. I most certainly don’t intend to write another book. I do intend to read a few more in 2020 than I did in 2019.

Excerpts from The CEO Factory: 

Advertising is the sexiest part of marketing. And it is different from everything that comes before in this book and from what will follow. It is the only part of business management where both the right brain and the left brain, feeling and thought, magic and logic, are equally used. Though it can be learnt up to a point, very few people have a natural flair for it. While many people in advertising agencies have a natural flair, they often lack a strategic business perspective. If you have both, it is a serious competitive advantage.

While many of us may never make ads for Television, all of us find the need to communicate simply. Some of us need to take the help of creative people to communicate better – a house we must build, a book cover we have to design or indeed a birthday party we have to organize. But getting the best out of creative people can be a tough task.

The HUL approach to advertising is a great life skill to have. HUL spends about Rs 3,500 crore on advertising and accounts for roughly 15 per cent of spends and 20 per cent of the country’s ads on TV (we buy much cheaper due to scale). Unilever believes that advertising is too important to be delegated. A senior person should lead the process from brief to production. That person can choose to consult with others or not. That’s her call. But ultimately in advertising, there should be one single decision maker, the advertising leader.

Over time, Taj had moved away from using Zakir Hussain as its ambassador to use more conventional celebrities like Madhuri Dixit and Saif Ali Khan. In 2013, just as I was taking over the tea category marketing in HUL, I heard two youngsters saying ‘Wah Taj’ when they spotted the santoor maestro Pandit Shivkumar Sharma at Mumbai airport. What a phenomenal memory structure to nurture! We moved Taj back to its old memory structure – classical musicians (in three subsequent ads we have used Niladri Kumar, Rahul Sharma and Nirali Kartik as our ambassadors) playing mesmerizing music to the refrain of ‘Wah Taj’. Taj advertising has suddenly become recognizable again and the brand has started gaining market-share after a decade.

The iconic Flipkart campaign is of two kids who look like adults, making e-commerce look like child’s play. In 2015, I was asked to become a member of the Flipkart Advisory Board. Flipkart had recently changed the ‘kids as adults’ idea for their ad campaigns. I remember telling Mukesh Bansal (who ran the company at that time) and the newly appointed CMO, my former Lever colleague Samardeep Subandh, to revert to the old concept.

It was a brilliant idea to show how simple e-commerce was (even kids could use it) and more importantly it was the brand’s DNA. Samar, being an old Lever hand, thought the same way and the campaign went back to the earlier one. Harish Manwani recalls how HUL’s marketing guru Shunu Sen was in a meeting where managers were saying that everyone was using film stars and perhaps Lux should move on. Shunu said something on positioning that Harish hasn’t forgotten: ‘Anyone can use a film star but only Lux can carry it off.’

Brands become great because at some time in their past, even near past as the Flipkart example shows, someone has an epiphany or a lucky breakthrough. It is wise to distil this moment in a bottle and constantly take swigs from it. Brands that haven’t had this epiphany need to understand their role in their consumers’ life and constantly look for clarity and insight. The moment will come, sometimes sooner and sometimes later, but when it does, recognize it, and make sure you stick with it.

How advertising works: Why fame is more important than persuasion

As a brand manager on Surf Excel some fifteen years ago, I would eagerly wait to see the impact of every new ad we made you are focused on salience you need to get a cracker of an insight. The insight is of course the heart of the brief. A contradiction obvious in hindsight.

For instance, ‘common ground is a cup away’ is a great insight for a tea brief. On the other hand, if you want to be persuasive, which is advisable only when you are building a category, you need a very compelling proposition or a promise. ‘Use Indulekha oil and grow back your hair in 4 weeks.’ A simple way of remembering this is that if you want to be remembered (as you should most of the time) empathize with your customer, but if you want to persuade her then formulate a sharp and relevant promise.

The advertising legend Piyush Pandey recalls a brief he received in the early 1990s for a new soap that HUL was planning to launch called Le Sancy. Le Sancy was designed to be a soap that didn’t get as mushy as regular soaps. The brief was a manual on how to make advertising on Le Sancy based on a successful launch in Chile twenty years ago.

The not-so-brief ‘brief’ contained everything from the size of the font to the TV script to which mediums must be chosen for advertising. But there were two things Piyush noticed. Print as a medium was left out of the guidelines and a sentence hidden in the mumbo jumbo saying ‘Quality that lasts and lasts’. He created what he says is one of his favourite print ads. A regular soap called Le Soggy that had melted in the water and the Le Sancy soap next to it with ‘Le Sancy’ written below. The tagline was of course ‘Quality that lasts and lasts’. He says instead of the manual, all he needed was that single line. Keep the brief memorable, insightful and, most importantly, BRIEF.

The Greek historian Herodotus said that when the Persians had to make a decision, they first made it when they were drunk and then made it again when they were sober. The decision had to be the same both times for it to be taken. Once you get an intuitive ‘go/ no go’ for an ad film, then put on your thinking cap again. Ask a few basic questions. Are the feelings the script evoked the ones you intended? Is the role of the brand integral to the film? Can you articulate the advertising idea easily? If the script passes the goosebump test and the answers to these three questions are yes, like the Persians, you are good to go.

For an executive working with a creative, there is one cardinal rule. Do not play the role of a creative and try to fix scripts yourself. Accept or reject. Tell them what you felt when you saw the ad. But do not suggest fixes. Give the advertising agency the problem and not the solution. It is important not to demotivate the agency with harsh feedback. It is a labour of love and you have to be always open to the fact that you may not have got it right. Equally, don’t get coerced into not expressing what you feel. Sometimes the agency will bring several people including very senior people into the room in an attempt to intimidate you. But if you don’t feel anything at the end of the script reading, you should say it. This isn’t just my advice for any business working with advertisement agencies – keep this as your cardinal rule as a professional working with any kind of creative. At HUL, judgement doesn’t stop simply at approving a script. As I said before, HUL accounts for roughly 15 per cent of the country’s ad spends on TV. Getting an ad wrong is extremely costly. After the script is approved it goes through – you guessed it – rigorous consumer work. First the script is read to a few consumers to see if they like it and understand it. The script then gets made into an animatic or a cartoon and is then quantitatively tested with consumers on a few key questions – is it enjoyable, is it branded and is it persuasive? The questions are on a 5-point scale and the scores are indexed with a database. It is considered a green light if it hits the top two-thirds of the database. In salience- or fame-type ads, I tend to push for the ad to be in the top 10 per cent of the database on branding and enjoyment. In market development-type films, I push for it to be in top 10 per cent on persuasion.

Producing great advertising: What’s the backstory

Production is the final stop in the advertising process. If the creative agency is the architect of the house, the director of the film is the mason. She actually builds it. The agency should have a free hand in choosing the director once you have finalized the costs. But have a look at the showreel of the director before approving the choice. In my experience, there are three kinds of directors – those who get emotions, those who get humour and those who shoot beautifully. Choose the director on the basis of what you want the ad to be like. The director will often look at the film slightly differently and you must be flexible in incorporating her idea while still being true to the script that was tested. A meeting called the PPM or pre-production meeting is the forum where HUL, the agency and the director meet to discuss how the script will be treated while being shot. Typically, the director will give her version of the film, show you the cast, the costumes, the locations and the music. PPMs can either pass quickly, with the client having no view on anything, or degenerate into silly conversations on whether the dress should be dark blue or light blue. The best PPMs are those where you have detailed conversations with the director on how she sees the characters in the film. What sort of people are they likely to be, what were they doing the same day before the events of the film unfolded? Also get an understanding of what in the film excites the director. Is it the same thing that excites the consumers? Once you are aligned on the soul of the film and the character of the actors, the director will do a much better job than you in selecting costumes, actors, music and sets. Let her. In general, if the PPM is good, it is usually a bad idea for the client to go for the shoot, and HUL discourages it. That is back-seat driving and often ends in an accident. When the final film is shown to you, react the way you should have when the script was read to you. Does it evoke any sensation in you? Treat it like you would after a meal has been served in an expensive restaurant. Add a bit of salt or pepper if you must, but don’t ask the chef to change the dish according to your taste. If the food doesn’t work for you, bear it with a philosophical grin. Likewise, while you can make minor changes to a film after it has been produced, there’s little you can do if it has fundamentally not worked out. The right course of action if the film doesn’t work is not to air it on TV. No point putting good money behind bad.

 (This is an extract from the book The CEO Factory: Management Lessons from HUL by Sudhir Sitapati, published by Juggernaut Books; 2019)

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