RETAIL LEADERSHIP SUMMIT 7TH & 8TH FEBRUARY 2013   A presentation by Mr. Harsh C. Mariwala       Chairman & Managing Direc...
BOMBAY OIL INDUSTRIES1971……..  Turnover  Rs. 5 crores   …amongst three businesses                   No Professionals      ...
Edible oils in bulk…                        &Contributing Rs.   50 Lakhs sales turnover…….                                ...
BOMBAY OIL INDUSTRIESExpanded Distribution Network & Promoted BrandsPackaging ChangesBuilt Organization Structure      Whi...
FORMATION1990 Acquired Consumer Products Division ofBombay Oil Industries Limited Opportunity     to re-design the organiz...
6
DIFFERENTIATION THROUGH    A UNIQUE CULTURE               Induction of professionals                    From different com...
PROCESS FOR CULTURE BUILDING    Draft note : ‘Corporate Values’    Top Management Discussions    Work with a group of 3 le...
PROCESS FOR CULTURE BUILDING                  Induction, training and                  annual review                  Comb...
HOW DID WE REINFORCE THESE VALUES?   Values Workshops        To understand / disseminate        Deeper meaning behind Valu...
BUILDING FOUNDATION OFPARTICIPATIVE CULTURE            Organization Communication                Across locations         ...
MARICO CULTURE    OPEN                        Sharing of Information INFORMAL              First names – artificial barrie...
PARACHUTE JOURNEY….   THROUGH INNOVATION                            Parachute WM                          created all seas...
PARACHUTE JOURNEY….        THROUGH INNOVATIONParachute Flip – Top – enables ease    of identification of genuine Parachute...
THREAT FROM HUL          HUL entered the coconut oil          market through the acquisition          of TOMCO          In...
MARICO’S RESPONSE1999 – 2000 : Nihar from HUL positioned as challenger toParachute :Backed by disproportionate advertising...
MARICO’S RESPONSEOn all fronts…    Product          Promotion            Distribution        Our Passion    Superior      ...
OUTCOMENihar met with little success : Only took sharefrom small playersMarico acquired Nihar in 2006Critical take-aways  ...
FROM A COCONUT OIL TO A BEAUTY BRANDInnovations in the look and packaging of hair oil                                  Aft...
INNOVATION : THE MARICO EXPERIENCERole Culture – open, trust, flat, participativeConsumer in sighting – even R&D.Mindset c...
EMERGING BEAUTY & WELLNESS PLAYER  Low margin          High margin    Indian               Global     Oils            FMCG...
• BUSINESS PERFORMANCE & EXPANSION                                   1990                 2012Brands                      ...
Price Indexed to 100                       0                           500                                 1000           ...
THE MOST AWARDED FMCG•   Kaya Ltd. won the ‘Most Admired Retailer for Health & Beauty at the Images Retail Award    2009.•...
ROLE OF CEO / TOP MANAGEMENTShow interest in softer aspects     •    Be focused - depth     •   Strong belief in People   ...
ROLE OF CEO / TOP MANAGEMENT IN      MAKING THIS HAPPEN     LEAD – Be a Role Model        • Walk the Talk     Identify wha...
What makes India UniqueIndia is Young!Rapid UrbanisationRural DevelopmentDigitisationGlobal Participation in RetailWorking...
What makes India UniqueShifting Socio-Economic StrataMcKinsey Situational Analysis                                        ...
What makes India UniqueShifting Consumption Patterns                                    29
What makes India UniqueLow Penetration Levels                                    30
Triggers for InnovationCulture of InnovationGetting the right TalentOutside In LearningsConsumer InsightingLeveraging Shop...
Apply Conventional Thinking  and you will only come up with     Conventional Solutions.       But open your Mind    and yo...
www.ascentfoundation.in                      33
What is ASCENTA “Peer-to-peer” enabling platform for Growth-ready Entrepreneurs     – CORE Model…           • Self-sustain...
Journey, so far . . .                 (9 months)                      202                      8,800+ crs400+             ...
Road Ahead      Next      Waves  1st Wave              36
For details & to apply visitwww.ascentfoundation.in                                 37
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Keynote Address: Institutionalizing Innovation - Harsh C. Mariwala, Chairman & MD, Marico Limited

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Keynote Address: Institutionalizing Innovation - Harsh C. Mariwala, Chairman & MD, Marico Limited

  1. 1. RETAIL LEADERSHIP SUMMIT 7TH & 8TH FEBRUARY 2013 A presentation by Mr. Harsh C. Mariwala Chairman & Managing Director Marico Limited 1
  2. 2. BOMBAY OIL INDUSTRIES1971…….. Turnover Rs. 5 crores …amongst three businesses No Professionals … family managed 2
  3. 3. Edible oils in bulk… &Contributing Rs. 50 Lakhs sales turnover……. 3
  4. 4. BOMBAY OIL INDUSTRIESExpanded Distribution Network & Promoted BrandsPackaging ChangesBuilt Organization Structure While building up distribution simultaneously 4
  5. 5. FORMATION1990 Acquired Consumer Products Division ofBombay Oil Industries Limited Opportunity to re-design the organization structure to address skill gaps Staffing – attracting managerial talent 5
  6. 6. 6
  7. 7. 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 7
  8. 8. PROCESS FOR CULTURE BUILDING Draft note : ‘Corporate Values’ Top Management Discussions Work with a group of 3 levels of Managers Communicating to members 8
  9. 9. 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 9
  10. 10. 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 10
  11. 11. BUILDING FOUNDATION OFPARTICIPATIVE CULTURE Organization Communication Across locations Group discussions Open House Relationship Management Program Relationship Review Goal Setting & Review 11
  12. 12. 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 12
  13. 13. PARACHUTE JOURNEY…. THROUGH INNOVATION Parachute WM created all season usage easeCreated the coconut oil usage explosion in consumer packs with HDPE 13
  14. 14. 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 14
  15. 15. 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? 15
  16. 16. MARICO’S RESPONSE1999 – 2000 : Nihar from HUL positioned as challenger toParachute :Backed by disproportionate advertising spendsStrong distribution muscleA mind set to be leaders in the categoryAcquisition threat by Levers to take over Marico entirelyMarico shares in the stock market fell dramatically 16
  17. 17. 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 17
  18. 18. OUTCOMENihar met with little success : Only took sharefrom small playersMarico acquired Nihar in 2006Critical take-aways Single minded focus can overcome brute force Motivating people down the line critical in crisis timesAn emotional & psychological victory for Marico 18
  19. 19. 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 Parachute – Body Lotion Therapie-First scientific solution for Hairfall 19
  20. 20. INNOVATION : THE MARICO EXPERIENCERole Culture – open, trust, flat, participativeConsumer in sighting – even R&D.Mindset creation for all – training is a good mediumPrototypingHigh collaboration – continuously align all stakeholdersOver commitment of resources – no escape buttonsPersistence – keep integrating new membersBeyond great ideas – need high rigor in implementation and detailed executionExposure to Thought LeadersCreation of in-house facilitationBrining in outside – travel fairsPerpetual reinforcement – Top Management reviews of Brand plans, sales plans, workshopsCapturing ideas from Members 20
  21. 21. EMERGING BEAUTY & WELLNESS PLAYER Low margin High margin Indian Global Oils FMCG Products Beauty and Wellness FMCG Products solutions 21
  22. 22. • 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 22
  23. 23. Price Indexed to 100 0 500 1000 1500 2000 2500 3000 3500 4000 4500 Apr-02 Dec-02 Aug-03 Apr-04 Dec-04 Aug-05 Apr-06 Dec-06 Marico Aug-07 Apr-08 Dec-08 Marico v/s BSE FMCG Index FMCG Index Aug-09 Apr-10 Dec-10 Aug-11 Apr-12 Dec-12 MARICO MARKET CAP JOURNEY23
  24. 24. 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 24
  25. 25. ROLE OF CEO / TOP MANAGEMENTShow 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 25
  26. 26. 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 26
  27. 27. What makes India UniqueIndia is Young!Rapid UrbanisationRural DevelopmentDigitisationGlobal Participation in RetailWorking WomenIncreased Age Span 27
  28. 28. What makes India UniqueShifting Socio-Economic StrataMcKinsey Situational Analysis 28
  29. 29. What makes India UniqueShifting Consumption Patterns 29
  30. 30. What makes India UniqueLow Penetration Levels 30
  31. 31. Triggers for InnovationCulture of InnovationGetting the right TalentOutside In LearningsConsumer InsightingLeveraging ShopperBehaviourLeveraging Analytics 31
  32. 32. 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. 32
  33. 33. www.ascentfoundation.in 33
  34. 34. What is ASCENTA “Peer-to-peer” enabling platform for Growth-ready Entrepreneurs – CORE Model… • Self-sustaining, Facilitated Trust-Groups of 8-12 non-competing diverse Entrepreneurs at similar scale & stage – With Perimeter access • to Eco-system of Knowledge Gurus, Inspirational Role-Models & Enablers – Eligibility Criteria (annual turnover) • 50 Lacs (& Above) – Services • 2.5 crs (& Above) – Manufacturing - Selection Criteria - Personal - Ambition to grow - Profitable Business with Growth potential - Willingness to learn and share• Not for profit, Section 25 Company – No membership fees - Funded personally “Being an Entrepreneur can be very Lonely!” 34
  35. 35. Journey, so far . . . (9 months) 202 8,800+ crs400+ Members INR 60+ 61Applications Aggregate Annual Diverse DIVERSE 20 turnover (so far…) INDUSTRIES Industries Trust GroupsRevenue Spectrum 10% 33% 50 Lacs – Women Entrepreneurs Family Business Age Spectrum 1,450 crs 40 : 60 23 – 56 yrs INR p.a. SPLIT BETWEEN MANUFACTURING & SERVICES Welcome to the Billion $ + + Circle of Trust ! 35
  36. 36. Road Ahead Next Waves 1st Wave 36
  37. 37. For details & to apply visitwww.ascentfoundation.in 37

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