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Harsh Mariwala's Marico journey
 

Harsh Mariwala's Marico journey

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Harsh Mariwala's Marico journey Harsh Mariwala's Marico journey Document Transcript

  • My Enterprising Journey… Harsh C. Mariwala Chairman & Managing Director Marico Limited
  • BOMBAY OIL INDUSTRIES1971…….. Turnover Rs. 5 crores …amongst three businesses No Professionals … family managed
  • Edible oils in bulk… &Contributing Rs. 50 Lakhs sales turnover…….
  • BOMBAY OIL INDUSTRIES Expanded Distribution Network & Promoted Brands Packaging Changes Built Organization Structure While building up distribution simultaneously
  • FORMATION1990 Acquired Consumer Products Division of Bombay OilIndustries Limited Opportunity  to re-design the organization structure  to address skill gaps Staffing – attracting managerial talent
  • DIFFERENTIATION THROUGH A UNIQUE CULTURE  Induction of professionals  From different companies  Melting pot of diverse cultures  Manifestation of different styles  Need to integrate for a common culture
  • PROCESS FOR CULTURE BUILDING Draft note : „Corporate Values‟ Top Management Discussions Work with a group of 3 levels of Managers Communicating to members
  • VALUES JOURNEY – 3PsThe 3-Ps intimately inter-related as the three corner stones of a mutually reinforcing triangle, each drawing from the other to create more of itself
  • VALUES JOURNEY What are the 3P’s of Marico?Some key characteristics : People : Open, participative, lean Trust Guidelines on Performance Mutually beneficial Relationship – Associates Products : Consumer Satisfaction Profits : Wealth maximization for all Stakeholders
  • PROCESS FOR CULTURE BUILDING  Induction, training and annual review  Combination of „top-down‟ and „bottom-up‟ initiatives  1991-94 : Non-workmen  1994 : Workmen  1995 : Business Associates
  • HOW DID WE REINFORCE THESE VALUES? Values Workshops  To understand / disseminate  Deeper meaning behind Values Base level Values practice survey on a 4.0 point scale  Conducted in 1992 *Score of 2.82  Repeated in 1995 *Score of 3.24 Leadership buy-in critical to reinforcing Values practices
  • BUILDING FOUNDATION OF PARTICIPATIVE CULTURE  Organization Communication  Across locations  Group discussions  Open House  Relationship Management Program  Relationship Review  Goal Setting & Review
  • MARICO CULTURE OPEN Sharing of Information INFORMAL First names – artificial barriers not therePARTICIPATIVE Consensus, task force – group workEMPOWERING Autonomy within directionMERIT BASED Influence does not work – loyalty not rewardedAPOLITICAL No Gossip !!JOB ROTATION Stimulus to organization & person LEARNING Higher responsibilities, cross functional exposure
  • PARTICIPATIVE CULTURE Path breaking practices at Plants  House System  Job rotation at workmen level  In-house jury for disciplinary issues Strategic Business planning  Cross functional team to create the plan
  • PARACHUTE JOURNEY…. THROUGH INNOVATION Parachute WM created all season usage easeCreated the coconut oil usage explosion in consumer packs with HDPE
  • PARACHUTE JOURNEY…. THROUGH INNOVATIONParachute Flip – Top – enables ease of identification of genuine Parachute and leak – proofing of pack Market expansion through :  PCNO pouches  Parachute Mini „B‟ Pack
  • THREAT FROM HUL HUL entered the coconut oil market through the acquisition of TOMCO In 1999 HUL acquired Cococare  Clear expression of interest in category Could Marico survive and MNC onslaught? Would Marico sell out?
  • MARICO’S RESPONSE 1999 – 2000 : Nihar from HUL positioned as challenger to Parachute : Backed by disproportionate advertising spends Strong distribution muscle A mind set to be leaders in the category Acquisition threat by Levers to take over Marico entirely Marico shares in the stock market fell dramatically
  • MARICO’S RESPONSEOn all fronts… Product Promotion Distribution Our Passion Superior “Contemporarizing” Ramping up our own Parachute Ki product quality purity with the distribution Kasam of Parachute Shuddhata ki Seal launched for internal sales Hi Value promotions force on Parachute
  • OUTCOME Nihar met with little success : Only took share from small players Marico acquired Nihar in 2006 Critical take-aways  Single minded focus can overcome brute force  Motivating people down the line critical in crisis times An emotional & psychological victory for Mar
  • FROM A COCONUT OIL TO A BEAUTY BRANDInnovations in the look and packaging of hair oil Aftershower-Gels & Creams Jasmine – Expand the market through lighter, fragrant oils Therapie-First scientific solution for Hairfall
  • OTHER INNOVATIONSProducts Revive Instant Starch Mediker Oil Natural MALO Revive Liquid StiffenerSolutions Kaya Skin Care
  • INNOVATION PRACTICES Finance Quarterly Dividend CEASE – Claim Expense Against Self Authorization SAP Big Bang implementation v/s Traditional approach of phased implementation
  • INNOVATION PRACTICES Human Resources No Muster Employees maintain their own leave record on the Intranet 1000 & 2000 Crore celebration ( inviting ex-Mariconians) Setting up a “All Staff” plant in Pondicherry and repeating in Dehradun Organization Structure  Two Bands – Manager & Partner  Not more than 5 levels from top to bottom Remuneration Structure  Individual freedom to choose – Flex International secondment  To non-competing organizations
  • JOURNEY FROM INDIAN TO INTERNATIONAL IBG (International Business Group) – Initial Days … A total Indian- Centric approach driven by :  Access to clusters of Indian expatriates in Gulf, US, Canada, Singapore & Malaysia  Common Ethnicity/ Hair Oiling habits Bangladesh, Nepal, Pakistan, Bhutan
  • JOURNEY FROM INDIAN TO INTERNATIONAL Coconut Oil Health Care Skin Care Hair Care
  • INCUBATION CELLEmergence of new businesses
  • Critical Takeaways Create room for nurturinginnovative, new ideas Remove escape buttons forpeople when you want anoutstanding result Seek opportunities continuously
  • INNOVATION : THE MARICO EXPERIENCE Role Culture – open, trust, flat, participative Consumer in-sighting – even R&D. Mindset creation for all – training is a good medium Prototyping High collaboration – continuously align all stakeholders Over commitment of resources – no escape buttons Persistence – keep integrating new members Beyond great ideas – need high rigor in implementation and detailed execution Exposure to Thought Leader Creation of in-house facilitation Bringing in outside – travel fairs Perpetual reinforcement – Top Management reviews of Brand plans, sales plans, workshops Capturing ideas from Members C&D Model
  • EMERGING BEAUTY & WELLNESS PLAYER Low margin High margin Indian Global Oils FMCG Products Beauty and Wellness FMCG Products solutions
  • BUSINESS PERFORMANCE & EXPANSION 1990 2012Brands 2 20 + Brand ExtensionsSales (Rs. Cr.) 80 4008Intl. Buss. (Rs. Cr.) 955Profit Before Tax (Rs..) 4.5 317ROE 28.4%  Last 20 years  Revenue grew at CAGR of 18%  PAT grew at CAGR of 27%  Shareholder returns since IPO - 30% p.a
  • MARICO MARKET CAP JOURNEY
  • THE MOST AWARDED FMCG• Kaya Ltd. won the „Most Admired Retailer for Health & Beauty at the Images Retail Award 2009.• Parachute was ranked the 2nd Most Trusted Brand in Bangladesh - The Bangladesh Brand Forum• Marico was awarded NDTV Profit Business Leadership Award 2009 - in the FMCG (Personal Hygiene) category• Parachute was awarded the Super Brand Status in the UAE by the Super brands Organization in 2009• Mr. Harsh Mariwala wins the Talent Management Award at the CNBC TV18 India Business Leader Awards – 2009• Mr. Harsh Mariwala wins the Ernst & Young ‘Entrepreneur of the Year Award’ 2009 in the Manufacturing Category• Marico is awarded the IMC Ramkrishna Bajaj National Quality Award (RBNQA) 2009 – Outstanding Achievement Trophy, in the Manufacturing Category• Marico won the Silver Edge Award for Automation of Banking Transaction & PDA based Sales Force Automation.• Marico Case Study of implementing Red Hat Linux for SAP awarded the Red Hat Consumer Showcase Award 2010
  • ENTREPRENEURSHIP (Start Up Phase) Skill Gaps • Consultants • Doing it yourself Ambiguity • Flexible • Courage of Conviction • Resilience Evolving Business Model Hard Work Learning Curve High uncertainty about future
  • ENTREPRENEURSHIP (Consolidation Phase) Medium & Short Term Organisation Structure, In House Function CQA, Safety, Legal, HR Culture Building Systems Team Building Image Building Delegation – Trust
  • ENTREPRENEURSHIP (Scaling Up) Public Company •Investor Relations, Quarterly Pressures, CSR Board Management Vision, Values & Culture Safety, Health & Environment Succession Planning Acquisitions • Starting New Business  Kaya, IBG Culture of entrepreneurship in a large organization
  • ROLE OF CEO / TOP MANAGEMENT Show interest in softer aspects • Be focused - depth • Strong belief in People • Be open to ideas • Operate from trust paradigm • Build constructive “no men” and not “yes men” • Willingness to experiment and learn from failures – fail fast – prototype • Agility – MBA – analysis paralysis
  • ROLE OF CEO / TOP MANAGEMENT IN MAKING THIS HAPPEN  LEAD – Be a Role Model • Walk the Talk  Identify what is relevant for business success • Prioritize • Delegate  Get the right people on board • Place them in roles based on strength
  • Apply Conventional Thinking and you will only come up with Conventional Solutions. But open your Mind and you will find a World ofOpportunities opening up before You.